The painstaking efforts by investment group Oaktree Capital Management (Los Angeles, California / USA; www.oaktreecapital.com) to sell film and packaging manufacturer Nordenia International (Greven / Germany; www.nordenia.com) have finally borne fruit. On 10 July the funds managed by the US group agreed to sell the German company to South Africa’s Mondi Group (Johannesburg; www.mondigroup.com).

As part of the agreement, Mondi is set to acquire 93.4% of Nordenia shares by means of a EUR 240m cash payment. The South African paper and packaging group also agreed to assume EUR 118m of debt and debt-like liabilities and a EUR 280m bond. The selling price, which is tantamount to more than six times Nordenia’s 2011 EBITDA or more than nine times its 2011 EBIT, values the whole company’s worth at EUR 655m. The sale, which is expected to be completed in Q4 this year, still has to meet the necessary regulatory approval and is subject to standard closing conditions.

Once approved, the deal will create one of the world’s leading consumer packaging businesses. Commenting on the purchase, Mondi CEO David Hathorn said, “The acquisition of Nordenia offers Mondi Group a unique opportunity to create a leading consumer packaging business, build on long term customer relationships across both businesses and establish a platform to expand further in high-growth emerging markets.”

A leading consumer packaging provider, Nordenia produces not only advanced films, bags and stand-up pouches, but also is active in lamination – all activities in which Mondi is engaged as well. The combination of the two businesses therefore will yield several cost synergies, which Mondi estimates will exceed EUR 15m and whose full impact will be felt by 2014. The South African group expects significant revenue opportunities as a result of the two companies’ complementary geographic fit and the established platform in high-growth emerging markets. The South African group's consumer packaging business generated revenues of EUR 281m in 2011, with production sites in Germany, Austria, the UK, Italy, Poland and Hungary.

In the wake of the acquisition, Mondi plans to reorganise its Europe & International business unit into four divisions – Uncoated Fine Paper, Packaging Papers, Fibre Packaging and Consumer Packaging. Nordenia is to become an integral part of the latter division, which will be headed by Nordenia CEO Ralph Landwehr.

A leading international consumer packaging and hygiene components supplier, Nordenia operates 12 facilities in Germany, Spain, Hungary, Russia, Poland, the US, China, Malaysia and Australia. The group’s greenfield plant in China is expected to begin operations in early 2014. Most recently, Nordenia USA opened a second operations site in Missouri – see Plasteurope.com of 02.07.2012. The group’s workforce exceeds 3,000.

The company has a very stable client base and can look on a relationship averaging 19 years for its 10 leading customers. Steady growth has seen Nordenia grow its revenues by an average 6% a year over the last 14 years. In 2011, the group posted revenues of EUR 881m, and adjusted EBITDA of EUR 101m as well as net earnings of EUR 14m – see also Plasteurope.com of 02.05.2012. Oaktree had tried unsuccessfully to sell Nordenia in 2010 (see Plasteurope.com of 01.02.2010) but, unable to find a buyer willing to pay the right price, then decided to put the sale on hold – see Plasteurope.com of 14.04.2010.

A leading international paper and packaging group, Mondi is active across 28 countries and generated sales of EUR 5.7 bn in 2011. Its workforce numbers 23,400.

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Mondi presentation on Nordenia acquisition as a PDF document