- WestRock ( NYSE: WRK ) entered into an agreement to acquire the remaining interest in Grupo Gondi for $970M, plus the assumption of debt, representing an estimated implied enterprise value of $1.763B.
- Through this transaction, the company will further enhance its leading position in the growing Latin American containerboard, paperboard and consumer and corrugated packaging markets.
- Grupo Gondi operates four paper mills, nine corrugated packaging plants and six high graphic plants across Mexico.
- Currently, WestRock owns 32.3% of Grupo Gondi, and this transaction will secure the remaining 67.7%.
- This acquisition is expected to be immediately accretive to earnings; WestRock expects to achieve an incremental $60M in annual synergies by year three post closure (expected by end of CY22).
- Grupo Gondi’s CY22 EBITDA is estimated to be ~$200 to $210M.
- The company expects the transaction to achieve a return on invested capital greater than 10% by year three post closure and for WestRock to remain within its targeted net leverage range of 1.75x to 2.25x debt to EBITDA.
For further details see:
WestRock to acquire remaining 67.7% interest in Grupo Gondi in an immediately accretive transaction