Mondi to buy Finnish pulp and paper mill operator Powerflute

Paper and packaging group Mondi has agreed to buy Finnish pulp and paper mill operator Powerflute, a division of Nordic Packaging and Container Holdings, for €365m on an enterprise value basis.

Powerflute operates an integrated pulp and paper mill in Kuopio with an annual production capacity of 285,000 tonnes of high-performance semi-chemical fluting. Its premium semi-chemical fluting is sold to a diverse range of customers, primarily for packaging fresh fruit and vegetables, but also other end-uses such as electronics, chemicals and pharmaceuticals. Around half of the company’s production is sold in Europe, while the rest is exported globally.

For the year to the end of December 2017, it is expected to generate revenues of around €183m and unaudited pro-forma adjusted earnings before interest, tax, depreciation and amortisation of around €42m. Powerflute will be integrated into Mondi’s packaging paper business unit.

Chief executive Peter Oswald said: “The acquisition of Powerflute supports our strategy of investing in high-quality packaging and paper assets. We are excited by this opportunity to expand our customer offering by further broadening our containerboard product range and geographic reach.”

The transaction remains subject to competition clearance and customary closing conditions and is expected to complete in the first half of 2018.

At 0900 GMT, the shares were down 0.7% to 1,872p.