Shares in DS Smith rocketed to an all-time high today after the company revealed it will buy an 80 per cent stake in US firm Interstate Resources for $920m (£709.7m).
This is the first foray into the US for the company that makes corrugated cardboard, recycled paper and plastic packaging.
DS Smith's FTSE 250-listed shares rose nearly 10 per cent to a record high of 487.8p.
The firm said it will fund part of the deal by raising $300m through an underwritten placing of new shares at 10p each.
DS Smith will also take on $226m of Interstate's debt.
Miles Roberts, chief executive of DS Smith, called Interstate a "well-positioned and attractive entry point for us into the US market".
"We have seen significant customer pull for our innovative packaging solutions in the US and are excited by the opportunity to grow and support our customers' needs over this large and growing market."
Interstate, which operates across the entire packaging chain, is a family-owned business concentrated on the east coast of the US.
DS Smith’s customers including Mondelez and Nestle have expressed interest in the firm entering the US market, and the firm approached a number of potential targets until it began talks with Interstate. Interstate reported revenue of $618m in 2016.
The British-based business will have the option to buy the remaining 20 per cent stake from Merpas, the company that holds the shares in Interstate, over five years.
DS Smith also reported a 31 per cent increase in full-year, pre-tax profit today to £264m driven by acquisitions from its European customers.