US packaging giant WestRock has paid $A75 million ($US60m) in cash to buy Australia’s largest privately-owned packaging manufacturer, Hannapak.
The NYSE-listed corrugated packaging company has maintained an 18-year-old partnership with Hanna Group (Hannapak) and the acquisition will allow the Georgia-based company to expand its packaging business in the region.
Hannapak, based at North Richmond in western Sydney, converts about 30,000 tons of paperboard a year into folding cartons for the beverage, food, confectionary and healthcare markets, including for WestRock beverage packaging customers.
Hannapak MD Sam Hanna will join WestRock and continue to lead the Australian business.
“Hannapak has built an outstanding folding carton business in Australia based on their superior capabilities and customer service,” says WestRock CEO, Steve Voorhees. “We have a strong relationship with the company and the Hanna family based on an 18-year partnership as one of our key converting partners in the region, and we are excited about the clear cultural and operational fit between the two companies.”
WestRock expects to generate “significant synergies” with its current business in the region, including integration of additional WestRock paperboard into the Hannapak system. The company also operates facilities in China and Japan.
“This acquisition expands our geographic footprint to better serve global and local customers, and will enable us to improve WestRock’s beverage packaging business in the region while expanding our participation to a variety of other attractive end markets,” says Voorhees.
The $A75 million purchase price will be paid in cash and is subject to a customary net working capital adjustment.
In January 2017, WestRock acquired US rival Multi Packaging Solutions for $US1.39 billion in equity, in a move described by Reuters as “the latest deal in the industry as companies globally seek to consolidate to combat weakening demand.”
Hanna Group was founded in 1957 by Charles Hanna Snr and his son, Charles Hanna, who started out manufacturing and selling printed advertising balloons from a small factory behind their home in Carlingford NSW.
Hannapak is Australia’s largest privately-owned, family-operated folding cartons company and operates a 30,000m2 facility at Bells Line of Road, North Richmond, where it employs over 220 full time staff.