Rexam said that it had acquired the company a cash consideration of £10 million, which also included the assumption of outstanding debts and that the transaction would be subject to working capital and other adjustments.Based on 2003 results for Polglass, the purchase price represents a multiple of 5.2 times EBITDA.Rexam said that, according to its forecasts, the business was expected to exceed cost of capital within the first financial year.
Polglass primarily supplies coloured bottles to Polish brewers, with the majority of sales going to Heineken's Polish subsidiary, Zywiec.
Rexam already has a flint glassworks in Poland located in Gostyn and the acquisition takes Rexam to the number two position in the Polish glass market with a 20 per cent share.
Commenting on the announcement, Rolf Borjesson, Rexam's chief executive, said: Following our recent announcement of a glass acquisition in the Netherlands, this latest transaction shows our commitment to building our position in the north European glass industry. It opens new market opportunities for us in the beverage segment in Poland and gives us a base for further consolidation and synergies.
With Poland due to become apart of the EU on 1 May, the acquisition is a good strategy deal in light of the new opportunities that enlargement presents. Poland is by far the largest agro-food producer of the ten accession states, and many industry observers also believe that it shows the most potential.
On top of that, glass packaging is still very popular within the region, as alternatives such as aluminium and PET have not caught on as fast as in western Europe. Overall, the volumes of packaging remain small too, with Poles using less than half the volumes compared to that of their western European counterparts.