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PaperlinX has announced that its acquisition of Buhrmann’s Paper Merchanting Division was completed on November 1 2003. The final price will be determined based on the accounts as at completion plus any deferred consideration based on the calendar year results and, as previously advised, is estimated to be approximately $1.1billion. Transaction costs are estimated to be a further €20million. Ian Wightwick PaperlinX managing director, says, "This is an exceptional opportunity for PaperlinX to add significant long-term value for its shareholders. We have been able to acquire Europe’s leading paper merchant at the bottom of the economic cycle. This is a significant step in the strategy we have consistently followed since listing in 2000."The fine paper merchanting businesses we acquire are profitable, well run by strong regional managers and operate in a model consistent with PaperlinX’s existing paper merchants. This minimises the risks related to growth by acquisition, and maximises the opportunity for us to achieve our targeted returns. We are very pleased to have concluded a rigorous due diligence process and acquisition, and now look forward to working with our new colleagues in Europe, Asia, Africa and North America to ensure a smooth integration of these businesses into the PaperlinX group.
"While the business environment remains subdued, we have positioned PaperlinX to benefit from improvements in economic activity and associated increased demand for paper. We offer our shareholders significant leverage to the economic cycle, while underpinning the value of the company with solid bottom of the cycle earnings and a strong dividend yield."
