SOUTH AFRICA (News release) -- Huhtamaki has entered into an agreement to acquire the majority of Everest Flexibles (Pty) Limited ("Everest"), a privately-owned flexible packaging manufacturer in South Africa. With the acquisition Huhtamaki will expand its flexible packaging manufacturing footprint into South Africa, thereby further strengthening its emerging market position. The product range and customer portfolio of Everest are complementary to those of Huhtamaki.
"With Everest we will be able to serve our current and new customers in South Africa and the surrounding region even better, offering them a full range of flexible packaging solutions with faster lead times," says Olli Koponen Executive Vice President, Flexible Packaging. "We will have two flexible packaging manufacturing units in Africa, Everest and the recently opened facility in Egypt. With these two sites we will be in an excellent position to tap into the growth opportunities of this exciting region," he continues.
Everest's manufacturing unit and an adjacent cylinder making facility are strategically located in Durban close to a seaport and major freeways. The annual net sales of the business to be acquired is approximately EUR 40 million and it employs altogether approximately 420 people. The business will be merged with Huhtamaki's current flexible packaging sales organization in South Africa and it will become part of the Flexible Packaging business segment.
The business will be acquired for an enterprise value of EUR 58 million. The consideration for 70% ownership of Everest will be paid partly in cash and partly in shares, as the sellers of Everest will enter into a joint venture also with Huhtamaki's Foodservice and Fiber Packaging operations in South Africa. As a result, the sellers of Everest will own 30% of all Huhtamaki's activities in South Africa. The joint venture structure allows Huhtamaki to improve its B-BBEE ("Broad-based Black Economic Empowerment") rating and subsequently competitiveness in South Africa.
The transaction is expected to be finalized within a few months, subject to the approval of competition authorities.
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