U.K.-based multinational packaging and paper group Mondi Tuesday announced its intention to expand its presence in Turkey by acquiring a majority stake in local packaging firm Olmuksan.
Mondi has agreed to acquire 90.38% of the outstanding shares in Olmuksan from International Paper for approximately 66 million euros ($81.06 million), the company said in a statement.
"We are excited by this unique opportunity to significantly strengthen our position in the fast-growing Turkish corrugated market and expand our offering to existing and new customers in the region," Mondi CEO Andrew King said.
The transaction remains subject to competition clearance and other closing conditions and is expected to complete in the first half of 2021, the company said.
Should the acquisition receive a green light, Mondi said it would then launch an offer to acquire the 9.62% of remaining shares held by minority shareholders. The implied enterprise value on a 100% basis would amount to about 88 million euros, it said.
Olmuksan, a leading corrugated packaging player in Turkey, which is listed on the Borsa Istanbul Stock Exchange (BIST), runs a network of five plants that produce sustainable packaging for food, beverage, agriculture and industrial applications.
For the 12 months that ended on Sept. 30, 2020, the Turkish company produced 256,000 tons of corrugated packaging and generated revenues of almost TL 1.1 billion ($150 million), Mondi said.
The business has more than 800 employees, according to information on its website, and was founded in 1968.
Mondi said it has operated successfully in Turkey for many years and has developed a strong understanding of the market and its long-term opportunities.
"Our current Turkish footprint includes four corrugated packaging plants and a recycled containerboard paper mill, as well as three flexible packaging sites. Leveraging our expertise and experience in this market, together with our global virgin and recycled containerboard portfolio, we expect to generate significant operational improvements and paper integration upside," it noted.
Mondi is a global leader in packaging and paper. Its business includes managing forests and producing pulp, paper and plastic films, as well as developing and manufacturing effective industrial and consumer packaging solutions.
The group is employing around 26,000 people across more than 30 countries.
In 2019, Mondi had revenues of 7.27 billion euros and underlying earnings before interest, taxation, depreciation and amortization (EBITDA) of 1.66 billion euros.
In its most recent update, Mondi reported that EBITDA fell 20% to 306 million euros in the three months to end-September.
Mondi has a premium listing on the London Stock Exchange and a secondary listing on the JSE Limited (MNP).