DS Smith has outlined plans to expand its packaging business into new geographic markets as it announced the long-expected sale of office products business Spicers.
The agreement to sell to Unipapel, a Spanish paper group, values the pan-European Spicers at £200m and is a key move in chief executive Miles Roberts’ strategy to focus the DS Smith group on recycled packaging for the FMCG markets.
A statement from DS Smith said that it would initially use the proceeds from the sale to pay down debt but that it would also make the funds available to expand its geographic footprint for its packaging businesses.
Any future acquisitions would build on last year’s £205m acquisition of French corrugated group Otor, which was announced last July, just two months after Roberts took over from Tony Thorne at the head of the group.
In a statement this morning, Roberts said the sale “represents a key strategic step in the streamlining of the DS Smith group to become focused on recycled packaging for consumer goods”.
He added: “We will work closely with Unipapel to ensure that Spicers’ customers continue to receive a high quality of service and to ensure a smooth transition period for customers and employees.
“Following the proposed transaction, our aim is to continue to focus on and build our European packaging business.”
DS Smith first mooted a sale of Spicers in December, when the results of a strategic review initiated by Roberts were announced.
In an interview with Packaging News two weeks ago, Roberts said that there was “no interaction” between Spicers and the rest of the DS Smith business.
He was also bullish about future expansion, saying the group would be “on the front foot” for future acquisitions.
“If the opportunity arises and they fit our strategy then we won’t be shy in coming forward,” Roberts said.
“It might be in six months or in six years – the key thing is that someone needs to say they are up for sale. But the opportunity will come.”
The Spicers deal is subject to the regulatory approval.
Assuming it is approved by the authorities, Unipapel will then sell the UK and Ireland divisions of Spicers to Better Capital, an investment fund, a separate announcement this morning revealed.
Josh Brooks, 6 July 2011
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