WestRock to acquire remaining shares in Grupo Gondi

WestRock has confirmed that it has entered into an agreement to acquire the remaining interest in Grupo Gondi for $970m, plus the assumption of debt, representing an estimated implied enterprise value of $1.763bn.

Upon completion of this transaction, WestRock will further enhance its position in the growing Latin American containerboard, paperboard and consumer and corrugated packaging markets. Grupo Gondi operates four paper mills, nine corrugated packaging plants and six high graphic plants throughout Mexico, producing sustainable packaging for a wide range of end markets in the region. The acquisition will provide WestRock further geographic and end market diversification as well as position the company to continue to grow in the Latin American market.

Grupo Gondi’s Monterrey packaging plant.

“Acquiring the remaining interest in Grupo Gondi is the next strategic step in our broader North American paper and packaging expansion strategy,” said David Sewell, CEO, WestRock. “As onshoring continues to grow in the region, WestRock will be well positioned to meet this growing demand with fully integrated operations in Mexico. We will also have expanded capabilities to serve customers across many geographies, driving additional productivity and cost savings.”

“WestRock and Grupo Gondi have been great joint venture partners over the past six years, working together to provide outstanding service and innovation for our customers,” said Alejandro González Cimadevilla, President and Chairman of the Board, Grupo Gondi. “Becoming part of WestRock, with its scale, geographic footprint, and customer-focused solutions, will further enhance our ability to provide complete packaging solutions for our customers.”

“When we complete this transaction, Grupo Gondi will continue to excel as part of WestRock,” said Eduardo Posada, CEO, Grupo Gondi. “I look forward to joining the WestRock team and serving our customers with the expanded capabilities and reach of WestRock.”

WestRock currently owns 32.3% of Grupo Gondi, and this transaction will secure the remaining 67.7%. This acquisition is expected to be immediately accretive to earnings, subject to purchase accounting adjustments. Grupo Gondi’s calendar year 2022 EBITDA is estimated to be approximately $200 to $210m. WestRock expects to achieve an incremental $60m in annual synergies by year three following the closing.

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