OCCG has operations in northern Mexico and the southern United States. OCCG employs 2,800 people (2,000 of whom are employed in Mexico), and is expected to generate $53m of earnings before interest, taxes, depreciation, and amortization [EBITDA] for the full year 2012.
Gary McGann, Smurfit Kappa Group chief executive, said: “We are very pleased to announce the completion of the acquisition of Orange County Container Group.
“This acquisition is fully consistent with our declared growth strategy, complements our existing Mexican business and increases our exposure to a demographically attractive and rapidly growing region. We remain comfortably within our stated leverage guidance of below three times and the acquisition delivers value through earnings accretion (year 1).
“Our focus now is on the effective integration of our businesses in the region which gives us an exciting platform to continue to provide creative packaging solutions to both current and prospective customers.”
According to Smurfit Kappa, the $340m cash consideration is being funded from, and represents a highly effective use of, the Group’s existing cash resources.