DS Smith to Buy 80 Percent of U.S. Packaging Firm Interstate Resources for $920 Million
(London, UK, July 3, 2017) DS Smith Plc (DS Smith or the Company) [on June 29] announced that it, along with its wholly-owned U.S. subsidiary, DS Smith Holdings, Inc. (together with the Company, the Buyer), has entered into a conditional agreement to acquire 80 percent of the total issued share capital of Indevco Management Resources, Inc. (IMRI), the holding company for the Interstate Resources, Inc. group (IMRI and its subsidiaries together, the IRI Group), from Merpas Co. S.a r.l. (Merpas) for consideration of US$920 million (approximately £722 million) (the Initial Acquisition). The Buyer will also assume or procure repayment of 100 percent of the IRI Group’s financial indebtedness at completion, expected to be approximately US$226 million (approximately £177 million).
The consideration for the Initial Acquisition will be subject to customary post-Completion net debt and working capital adjustments.
The Buyer intends to satisfy the consideration through: (i) a payment of US$846 million (approximately £664 million) in cash, to be satisfied out of the proceeds of a £280 million cash placing (net of commissions and expenses) (the Placing), utilisation of up to £400 million from a new bridge facility (the New Debt Facilities) and the rest from existing cash resources; and (ii) the issue of consideration shares with a value of US$300 million (approximately £235 million) to Merpas (the Consideration Shares).
The Buyer and Merpas UKCo (an entity within the Merpas group that will hold the shares in IMRI) have also agreed that, on fixed dates over the next four years, Merpas UKCo can require the Buyer to acquire some or all of the remaining shares in IMRI on agreed terms and, on the fifth anniversary of Completion, the Buyer shall (unless the Buyer and Merpas UKCo agree otherwise) acquire any shares in IMRI that it does not already own, on agreed terms (any such further acquisition of shares in IMRI being a Further Acquisition and, together with the Initial Acquisition, the Acquisition). (Source: DS Smith Plc)