DS Smith says first half in line as it announces acquisition of Spain's Andopack

6th Nov 2014 09:58

Recycled packing company DS Smith announced the acquisition of Andopack as it reported that the group performance remained in line with expectations in the first half.The company said the acquisition of Andopack, a Spanish corrugated board producer, gives the group a direct market position in the nation, "allowing us to meet the demands from our pan-European customers to have a presence in this important market".The total consideration, including the assumption of debt, is expected to be £35m, subject to closing adjustments.The group will use existing cash resources to pay for the firm, which is projected to deliver a return on invested capital above DS Smith's cost of capital in the second year of ownership.Alongside the announcement of the deal, the group released a trading update for the first half which revealed like-for-like corrugated box volume growth is ahead of last year.Return on sales improved and the company delivered a strong cash flow performance due to focus on working capital and tight capital management.DS Smith said the outlook remains "positive as the business continues to grow, despite economic headwinds in many of our markets"."The board expects continued performance in line with the group's medium term financial targets."