Australian packaging company Colorpak is going ahead with a plan to buy the folding carton making businesses owned by Carter Holt Harvey, including a plant in Auckland, after checking the books.
Carter Holt Harvey is owned by Graeme Hart's Rank Group and the New Zealand billionaire has been focusing on
building a global beverage packaging business from the Carter Holt business he acquired from International Paper.
Colorpak said yesterday it had completed due diligence and signed relevant agreements with Carter Holt Harvey to buy its folding carton businesses at Reservoir and Mt Waverley in Victoria, Villawood in New South Wales and in Auckland for A$5 million ($6.6 million).
The acquisition, which was first signalled in October, gives Colorpak entry into the New Zealand market via the manufacturing operation in Auckland.
The company has previously said that the businesses being acquired employ about 658 people.
Colorpak has also entered into agreements with entities in the Rank Group for the supply of folding carton board and corrugated shippers in both Australia and New Zealand. Under the agreement, Colorpak will source much of its folding carton board from the Whakatane mill, which is ultimately owned by Rank Group.
Colorpak managing director Alex Commins said the acquisition was a defining event for his company.
The deal does not include Carter Holt Harvey's Smithfield operation in NSW, which will be sold to another industry participant.
The transaction is expected to be completed in March or April, when the sale of the Smithfield business will be simultaneously completed.
Adjusted for Smithfield's exclusion, the transaction will increase Colorpak's sales by around A$125 million to about A$210 million in 2012.
- NZPA
