Colorpak thinks outside the square with Carter Holt Harvey acquisition

$5 million acquisition of Carter Holt Harvey’s folding carton operations allows Colorpak to move into New Zealand.

The Victorian-based manufacturer has entered an agreement where, for a net consideration of $5 million, it will acquire Carter Holt Harvey’s folding carton operations in Australia and New Zealand, giving it access to all of the operating liabilities of the business, which include plant and equipment, working capital, premises leases and all employee entitlements.

Alex Commins, managing director of Colorpak, believes that the acquisition will put the company in strong standing for the future, citing a reach across the transTasman as key. Carter Holt Harvey has a manufacturing operation in Auckland.

“This is a unique opportunity in our company’s history to take a leading role in the industry,” he said. “Combing with CHH will significantly enhance our business in the folding cartons sector and enable us to service clients with a broader product and service offering across the whole of Australia and New Zealand.”

Sales for Colorpak are expected to increase from $80 million to $250 million. Colorpak and Reynolds Group Whakatane Mill have entered into a long-term agreement for the supply for folding carton board on competitive commercial terms.

A statement from Carter Holt Harvey said that: “We are pleased Colorpak has acquired our folding carton converting business. We have entered into a supply agreement with Colorpak that will see mutual benefits to both them and their customers for the long-term.”

Commins added that Colorpark will undertake “a thorough review of operations in due diligence” and immediately post-acquisition in order to fine-tune its integration plan.

The deal is expected to be complete later this year or early 2011.