London, England 29 June 2017 -- DS Smith has taken its first step into the packaging market of the USA with a proposed acquisition of Interstate Resources.

DS Smith and its US subsidiary DS Smith Holdings, Inc. have entered into a conditional agreement to acquire 80% of the total issued share capital of Indevco Management Resources, Inc., the holding company for the Interstate Resources, Inc. group (IRI), for consideration of $920m.

The IRI Group operates two paper mills (one kraft, one recycled containerboard), 12 corrugated manufacturing plants, a biomass power plant, a timber plant, a lumber plant and seven warehouses in the USA. In 2016, the group sold 342,000 t of kraftliner and 192,000 t of recycled containerboard and had corrugated sales volumes of 440m m² (roughly 260,000 t). The IRI group has 1,500 employees and recorded sales of $618m.

DS Smith believes the acquisition offers a "well-positioned, balanced and invested platform to build a significant market position" in the USA and expects "significant customer pull" for its fibre-based packaging solutions in one of the largest packaging markets.