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CMPC buys tissue assets in Brazil
A report from Celfin Capital, Santiago, Chile, indicates that CMPC Tissue - an affiliate of Chile-based Empresas CMPC - has signed an agreement with Brazil's Melpaper to acquire 100% of its subsidiary Melhoramentos Papeis (MP). The transaction is expected to close June 1 and includes only MP's Brazilian assets: two upto- date tissue mills with aggregate capacity of 75,000 tpy and both ISO 9001:2000 certified. The Caieiras mill serves the consumer market and the Mogi das Cruzes mill serves the institutional segment. Both are in S‹o Paulo state. Celfin states that CMPC is paying $US55 million in cash and assuming $US107million in debt, for a total transaction value of US$162mn. MP generates annual revenue of $US190 million, with Brazilian market share of 10%, ranking it third in Brazil after Santher (15%) and Kimberly-Clark (12%). In operational terms, the transaction would be for $US2, 160/ton. This compares to greenfield expansion costs of $US1,000/ton, but the difference in costs represents acquisition of a high market share, client know-how, logistics and infrastructure, which has high value, especially considering the size of Brazil. CMPC is the largest company in Latin America producing tissue locally: it has market share of 76% in Chile, 48% in Argentina, 85% in Uruguay and 50% in Peru. It is building a $US60-million tissue line in Colombia and has an 87.13% equity interest in Mexico-based ABS International. |
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