The news comes as Colorpak completed its due diligence and signed a formal agreement with CHH as part of a $5m deal announced in October.
The companies revised their original heads-of-agreement to exclude the Smithfield site in Sydney’s west. It means Colorpak has taken on the CHH sites in Reservoir and Mount Waverley in Victoria, Villawood in NSW, and Auckland in New Zealand.
Colorpak managing director Alex Commins told ProPrint that the due diligence process revealed the Smithfield site “wasn’t an optimal fit” for Colorpak’s operations.
Amcor has now signed conditional sale agreement for the Smithfield site. The sale remains subject to approval by the ACCC and is expected to be completed by mid-April.
An Amcor spokesperson told ProPrint: “The Smithfield operation will complement Amcor’s existing folding carton business in Australia and provide additional scale and capability, and as part of that business will provide an even stronger value proposition for our customers.”
Colorpak has revised its sales forecast down by $40m in light of the Smithfield exclusion, with the acquisition set to increase sales by around $125m to around $210m for the year ending 30 June 2012. The company had originally projected annualised revenues to increase to $250m.
The deal sees Colorpak enter the New Zealand market through the acquisition of CHH’s Auckland plant, as well as boosting Colorpak’s folding carton market share to 30%.
“The acquisition of CHH’s folding carton operations is a defining event for our company and catapults us into a leading industry position,” Commins said.
“The acquired businesses are very complementary to Colorpak’s existing business base and expertise, and provide the company with a broader market and considerably more manufacturing flexibility.”
Colorpak will acquire all the operating assets and assume all of the operating liabilities of CHH’s folding carton business (excluding Smithfield), including plant and equipment, working capital, premises leases and all employee entitlements.
The deal also includes CHH subsidiary Montage Graphics, a pre-press company that services CHH’s carton and corrugated businesses, as well as the trade.
Colorpak operations manager Paul Commins will lead a team to oversee the integration of the two companies. The process is expected to be completed within two years.
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