The Mayr-Melnhof Group has reached an agreement to acquire Kotkamills Group Oyj (“Kotkamills”) from the previous owners for an enterprise value of around EUR 425 million; this corresponds to approximately 7.8 times the EBITDA of the last twelve months. With the takeover of Kotkamills, MM Karton will expand its position in the attractive market for virgin fiber board (FBB) and Food Service Board (FSB) and complement its established market position in recycled cardboard. The planned transaction will have an immediate impact on earnings.
Kotkamills operates two cardboard / paper machines at the integrated location in Kotka (southern Finland): one FBB / FSB cardboard machine, which was commissioned in 2016 after an investment of more than 180 million EUR, with a current sales volume of around 260,000 t and one planned capacity of 400,000 t; a machine for Saturated Kraft Paper / impregnation paper with a capacity of 170,000 t, which makes the company one of the world’s leading suppliers. Kotkamills employs around 500 people and in the last twelve months achieved an EBITDA of around EUR 55 million on sales of around EUR 380 million.
The purchase price is financed from committed credit lines. The transaction is subject to customary closing conditions and the approval of the regulatory authorities. The transaction is expected to close in mid-2021.
Strategic relevance
*Strengthening the competitive position of the MM Group in the growing European FBB and FSB market compared to the two market leaders
*Creating a strong second pillar in addition to coated recycled cardboard and liner
*Benefit from increasing the FBB and FSB volumes (from the current sales volume of 260,000 t to a planned capacity of 400,000 t)
*Offer of FSB barrier cardboard solutions that can replace plastic and polyethylene-coated cardboard
*Diversification of the business by adding a new product (via Kotkamill’s strong competitive position in high quality Saturating Base Kraft / impregnation paper)
*Use of synergy potential
MMag. Peter Oswald, CEO of the Mayr-Melnhof Group, comments: “The takeover of Kotkamills ideally complements our existing cardboard business. It strengthens MM’s business model as a focused cardboard and folding box manufacturer with a stronger position in virgin fiber cardboard, which has good growth potential. Kotkamills makes an important contribution to MM’s sustainability strategy and offers innovative solutions for plastic substitutes. We have great confidence in the top-class team at Kotkamills to shape a promising future together. “
https://www.mayr-melnhof.com/newsroom/presseaussendungen/mayr-melnhof-karton-erwirbt-kotkamills/