The Board of DS Smith announced recently that it has submitted a binding offer for the proposed acquisition of Otor, a leading corrugated packaging company in France
The Otor Group consists of Otor S.A., the shares of which are listed on NYSE Alternext Paris, and Otor Finance, a holding company for The Carlyle Group which owns and controls 94.75 per cent. of Otor S.A. The remaining 5.25 per cent. of the shares of Otor S.A. are in free float on NYSE Alternext Paris.
Under the terms of the binding offer, DS Smith intends to acquire control of more than 95 per cent. of the share capital of Otor from entities controlled by Carlyle, from Credit Lyonnais and from the chairman of Otor S.A. before making a mandatory offer for the remaining shares of Otor S.A. in accordance with French stock exchange regulations. The total consideration for the Proposed Acquisition, including the Minority Offer, of €247 million, will be in cash and the assumption of existing debt, equivalent to an all cash offer of €8.97 per Otor S.A. share. Under French regulations a inority squeeze
out can be achieved with a shareholding representing 95 per cent. of the shares and voting rights.
Miles Roberts, Group Chief Executive of DS Smith stated: "The acquisition of Otor realises a number of key strategic objectives for DS Smith. It makes us one of the leading players in corrugated packaging in France with 80 per cent. of Otor’s sales derived from cyclically less sensitive FMCG customers. Extensive due diligence gives us confidence that Otor is a high quality business with structural growth opportunities, notably in shelf-ready packaging where penetration is markedly lower than in the UK. Otor also offers an excellent platform for DS Smith to increase its European sales penetration. The acquisition realises several of our financial objectives for DS Smith. Otor is a high margin business that should be accretive to both earnings and returns for the enlarged group in the first full year of ownership."
