London-based DS Smith PLC has announced that it, along with its wholly owned U.S. subsidiary DS Smith Holdings Inc., has entered into a conditional agreement to acquire 80 percent of Indevco Management Resources Inc. (IMRI), the holding company for Interstate Resources Inc. (IRI Group).
The seller of the 80 percent IMRI share is Merpas Co. S.à r.l., a Luxembourg-based holding company that will receive $920 million (€809 million) if the deal is completed.
DS Smith describes the IRI Group, which is based in Arlington, Virginia, as a family-owned integrated packaging and paper producer concentrated on the East Coast of the United States. It operates from 19 production sites and has approximately 1,500 employees. In 2016 the IRI Group had revenue of $618 million.
The integrated operations of the IRI Group include wood procurement, paper manufacturing, design, packaging manufacturing and customer logistics. On its website, IRI Group says its corrugating medium mill relies 100 percent on recovered fiber. “Many of the grades at our kraftliner paper mill are high in recycled content,” says IRI on the site, adding, “Trim, scrap and reject materials from our box plants are recovered, baled and sold [for recycling].”
Customers in the United States accounted for 94 percent of IRI Group’s sales in 2016, says DS Smith, “with the majority of the IRI Group’s customer base for its packaging products being FMCG (fast-moving consumer goods) and food customers.”
“We are delighted to announce the proposed acquisition of Interstate Resources, a well-positioned
and attractive entry point for us into the U.S. market,” says DS Smith Group Chief Executive Miles Roberts. “We have seen significant customer pull for our innovative packaging solutions in the U.S. and are excited by the opportunity to grow and support our customers’ needs over this large and growing market. We very much look forward to working with all the employees, customers and suppliers of Interstate Resources.”
Neemat Frem, INDEVCO Group and IRI CEO, says, “A strategic combination with DS Smith provides a great opportunity for the IRI Group, its employees, customers, suppliers and other stakeholders.
DS Smith has a strong track record of achieving sustainable growth and shares similar values and a
customer focus with INDEVCO.”