RPC Group to expand in China & India following €386m Promens acquisition
RPC’s polymer consumption is expected to increase from approximately 325,000 tonnes per annum to approximately 445,000 tonnes or 4.5% of the total European output of polymers for rigid plastic packaging.
General Meeting December 17
The acquisition is conditional on the approval of the shareholders of RPC who will hold a General Meeting on December 17.
Pim Vervaat, CEO, RPC, said the announcement marks a key strategic milestone for the firm and Promens manufacturing footprint in China will complement its existing platform in the region, established through the Ace acquisition earlier this year.
It acquired Ace in June this year, a China based and Hong Kong headquartered manufacturer of complex plastic injection moulded components and injection moulding tools for the packaging, lifestyle, medical, power and automotive end markets. It operates from five factories in China and has an annual turnover of circa £104m.
Vervaat said the deal will add niche technologies to RPC’s existing capabilities including vacuum forming, reaction injection moulding and expanded polystyrene capabilities as well as entry into several countries, strengthening selected market positions in core European end markets where Promens is already a highly respected player.
M&H Plastics and Helioplast
In 2013/14 the Group also made two acquisitions in Europe; Maynard & Harris (M&H Plastics) in the UK and Helioplast, in Bosnia-Herzegovina. Both have been successfully integrated within the Group and both have made a good contribution to the half year results.
“The performance in the first half year has been encouraging with good growth in selected areas, the progression of the Fitter for the Future programme and the contribution from recent successful acquisitions,” he said.
“The Vision 2020 Focused Growth Strategy is making good progress with the proposed acquisition of Promens providing an attractive opportunity to extend and consolidate the Group’s leading market positions, creating shareholder value.
“The second half of the year has started satisfactorily and the Group remains well placed to benefit from an economic recovery in Europe.”
Growing platform in emerging markets
Promens is a European manufacturer of rigid plastic packaging products and rigid plastic components, with a growing platform in emerging markets. It has 40 plants of which 35 are located in Europe.
It employs approximately 3,800 people. For the year ended 31 December 2013, Promens achieved revenues of €582m (£462m) and EBITDA2 of €57m (£45m).
Vervaat said following completion of the deal, it will form a Rotational Moulding and Vehicles cluster and polymer purchasing will be centrally coordinated.
“Promens has an attractive global presence in selected end markets. It generated €36m of sales (6%) outside Europe in 2013 and its global Rotational Moulding business is supported through facilities in China, India and Canada,” he added.
“It operates Personal & Healthcare facilities in Tunisia and Russia and is currently establishing a manufacturing base in China in the Personal Care segment, which is complementary to RPC’s Ace business.”
RPC proposes to fund the consideration in part through a fully underwritten rights issue of up to 62,595,576 New Ordinary Shares at 320 pence each on the basis of 1 New Ordinary Share for every 3 Existing Ordinary Shares to raise approximately £200m.
The balance will be funded through RPC’s existing RCF, which has been increased from £350m to £490m. The Board expects leverage as at March 31, 2015 to be approximately 2.0 times the Enlarged Group’s net debt / EBITDA post completion.
