West Rock Company will acquire the remaining interest in Grupo Gondi, expanding its geographical footprint in the attractive Latin American market.
West Rock Company will acquire the remaining interest in Grupo Gondi for $970m, plus the assumption of debt, representing an estimated implied enterprise value of $1.763bn.
West Rock currently owns 32.3 per cent of Grupo Gondi, and this transaction will secure the remaining 67.7 per cent. This acquisition is expected to be immediately accretive to earnings, subject to purchase accounting adjustments. Grupo Gondi’s calendar year 2022 Ebitda is estimated to be approximately $200m to $210m. West Rock expects to achieve an incremental $60m in annual synergies by year three following the closing.
Grupo Gondi operates four paper mills, nine corrugated packaging plants and six high graphic plants throughout Mexico, producing sustainable packaging for a wide range of end markets in the region. The tuck-in acquisition will provide West Rock further geographic and end market diversification as well as position the company to continue to grow in the attractive Latin American market.
The acquisition, which is subject to a number of customary closing conditions, including approval by regulatory authorities in Mexico, is expected to close by the end of the calendar year 2022, after which the Company would consolidate Grupo Gondi into its financial statements. West Rock is funding the purchase with existing liquidity.
"West Rock and Grupo Gondi have been great joint venture partners over the past six years, working together to provide outstanding service and innovation for our customers,” said Alejandro González Cimadevilla, Grupo Gondi's president and chairman of the board. "Becoming part of West Rock, with its scale, geographic footprint, and customer-focused solutions, will further enhance our ability to provide complete packaging solutions for our customers.”