UPDATE 1-Bunzl still has firepower after acquisition spree

Thu Jan 10, 2013 6:57am EST

* Approximately 140 million pounds spent on latest acquisitions

* CEO says lots of firepower left for more deals

* Shares up 4.7 percent

By Christine Murray

LONDON, Jan 10 (Reuters) - Packaging distributor Bunzl will use its balance sheet to step up acquisitions in 2013, the chief executive said after announcing a clutch of new deals in the Americas.

"We have a lot of firepower left," Bunzl CEO Mike Roney told Reuters in an interview, highlighting that the group's debt levels are below its own targets and that its pipeline is still good.

"We feel very optimistic about the opportunity for acquisitions in 2013."

Bunzl said on Thursday that it had bought South American personal protection equipment firms Vicsa Safety and Vicsa Brasil.

The move will mark Bunzl's first steps into Chile, Argentina, Colombia and Peru, countries in which Roney says he will now be looking for more acquisitions.

The company also added Chicago-based Schwarz Paper to its portfolio, which doubles the size of Bunzl's presence in non-food retail packaging in North America, and Californian produce bag supplier Destiny.

Analysts estimate the buys will cost the group around 140 million pounds ($224 million) in total.

Broker JP Morgan said in a note that it thought some analysts had been disappointed by what they considered to be an underspend in the second half of 2012, but Roney said that this latest surge was positive.

"They come a bit like London buses," Roney said. "They don't come regularly and you can't time these things."

Bunzl, which supplies supermarkets, hospitals and hotels with products ranging from carrier bags to toilet rolls, has no competitors that work across borders and so has exclusivity on the great majority of the deals it works on.

"That's what enables us to buy these businesses for reasonable multiples," Roney said. "We're buying mostly from family businesses so they're complicated and you can't time when they close."

Shares in Bunzl were up 4.7 percent by 1137 GMT at 1,063 pence, reversing falls suffered after a weak trading statement in December.

The group's 2012 acquisition spree will add about 500 million pounds ($800 million) to group revenues. It spent 270 million pounds buying up companies in 2012, the highest since it spent 302 million in 2004.

"It would be nice to beat that record in 2013," Roney said.

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