Huhtamaki Oyj will acquire a 70 percent stake in privately-owned South African flexible packaging manufacturer Everest Flexibles (Pty) Ltd, valued at 58 milion euros ($63.2 million).
Subject to customary approvals, the transaction is expected to be finalized in “a few months”, said the Espoo, Finland-based flexible packaging specialist in a Sept. 27 news release.
Post-acquisition, Hutamaki will enter a 70/30 joint venture business with the sellers in South Africa, a move that will help the Finnish company improve its B-BBEE (broad-based black economic empowerment) rating as well as competitiveness in South Africa.
In addition, Huhtamaki agreed that the sellers, who will continue as minority owners, of Everest to become minority owners in Huhtamaki's existing foodservice and fiber packaging business in South Africa.
"These businesses produce egg and fruit packaging of recycled fiber and food service packaging primarily of virgin fiber. So there will be, after the transaction is closed, two JVs wherein Huhtamaki is the majority owner," explained Huhtamaki in a written statement to PNE.
With a manufacturing unit and an adjacent cylinder making facility near Durban, Everest registered annual sales of nearly 40 million euros ($43.6 million) in 2018 and employs roughly 420 people, according to Huhtamaki.
The acquired business will be merged with Huhtamaki’s current flexible packaging sales organization in South Africa and will be integrated into the company’s Flexible Packaging business segment.
"With Everest we will be able to serve our current and new customers in South Africa and the surrounding region even better, offering them a full range of flexible packaging solutions with faster lead times," Olli Koponen executive vice president, flexible packaging, said.
The Durban plant will be Huhtamaki’s second flexible packaging production unit in Africa, after its recently opened facility in Cairo, Egypt.
“With these two sites we will be in an excellent position to tap into the growth opportunities of this exciting region," Koponen noted.
Everest Flexibles, according to Bloomberg, was founded in 1994 and its line of business includes the manufacturing of synthetic resins, plastics materials, and non-vulcanizable elastomers.