The acquisition of De Jong Packaging Group will significantly strengthen Stora Enso’s European market presence in corrugated packaging and provide an entry into the Netherlands, Belgium, Germany and the UK. With this acquisition, Stora Enso’s Packaging Solutions division will increase its corrugated packaging capacity by approximately 1,200 million m2 to more than 2,000 million m2, including De Jong Packaging Group’s ongoing expansion projects. This will secure a platform for continued growth in key markets. The European corrugated packaging market is fragmented, with local presence key for sustainable growth.
The enterprise value of the transaction is approximately Euro 1,020 million of which Euro 250 million is IFRS lease liabilities. The enterprise value corresponds to a multiple of 8.9, based on an adjusted EBITDA of Euro 114 million for 2022. In 2025, when the ongoing expansion projects in packaging converting are ramped up, an additional EBITDA of Euro 40 million is estimated to be delivered. In the mid-term, after 3 years, the acquisition is expected to generate average annual synergies of Euro 30 million over the cycle, mainly through sourcing, containerboard integration optimisation and commercial opportunities. If Stora Enso decides to proceed with the currently studied conversion of the Langerbrugge paper production site in Belgium to containerboard, further synergies will be possible. Stora Enso may in 2024, make a maximum additional earn-out payment in cash of Euro 45 million, subject to De Jong Packaging Group achieving certain earnings thresholds.
De Jong Packaging Group’s full year 2022 sales is estimated at approximately EUR 1 billion. The acquisition is expected to be EPS accretive from the first year. The acquisition will be financed through existing liquidity and bilateral loan arrangements. Stora Enso’s net debt to operational EBITDA ratio will increase by 0.4 to 1.4. Closure of the transaction is expected at the beginning of 2023, subject to employee consultation and regulatory approval. Stora Enso’s full year 2022 operational EBIT guidance remains unchanged.
Founded in 1996, De Jong Packaging Group is one of the largest corrugated packaging producers in the Benelux countries.
Stora Enso is a leading provider of renewable products in packaging, biomaterials, wooden construction and paper, and one of the largest private forest owners in the world.
