RPC Group buys Promens in €386m deal
Monday, December 1, 2014
RPC, the UK-based plastic packaging supplier, has announced the €386m (£306m) acquisition of Iceland-based Promens Group.
Announcing the deal last week, RPC chief executive Pim Vervaat said: "The combination of RPC and Promens provides a unique opportunity to create an enhanced platform of scale across our core European end markets.
"The enlarged group will benefit from opportunities to extend its product and technology offering across the full breadth of its combined operations as well as to achieve cost efficiencies."
Promens has 40 plants, the bulk of which (35) are in eastern Europe, to RPC Group's 50 plants throughout Europe, the UK, US and China.
Nicholas Mockett, head of packaging M&A at Moorgate Capital, said: "Since the management buy-out in 1991, RPC Group has long been a leading consolidator in the rigid plastic packaging industry, particularly in Europe and more recently in China and US.
"Following RPC’s earlier acquisition of Superfos, Promens is a natural fit. It is another significant step in improving the industry structure and meeting the demands of the customers to enjoy the same high standards of quality and compliance in more countries.
"RPC is a recognised innovator in plastic packaging, including printing of braille directly onto primary packaging and all-over printing on plastic lids to provide a premium product. The deal will broaden the geographic footprint available to service the multinational clientele."
RPC highlighted the fact Promens also has manufacturing facilities in China, which it said would complement its own regional platform established through the acquisition ACE earlier this year, and in India.
The board said the deal would strengthen RPC's position in its core markets while adding niche technologies, such as rotational moulding, vacuum forming, reaction injection moulding and expanded polystyrene capabilities.
The group expects to achieve cost synergies of "at least €15m" per annum within three years of completion, with half of these to be achieved in the first full financial year post completion.
RPC is funding the acquisition through a £200m rights issue, with the balance coming from its revolving credit facility, which will increase from £350m to £490m.