TIDMRPC
RNS Number : 9953R
RPC Group PLC
15 December 2016
15 December 2016
RPC Group Plc
Proposed Acquisition of Astrapak Limited
RPC Group Plc ("RPC"), a leading international design and
engineering company of plastic products for both packaging and
non-packaging markets, today announces its proposed acquisition of
Astrapak Limited ("Astrapak" or the "Company") by way of a public
offer. The consideration, based on an enterprise value of the
operational assets being acquired by RPC of ZAR 1,370 million
(GBP79 million)(1) on a cash-free, debt-free basis, is equivalent
to an enterprise value to underlying EBITDA FY16A multiple of
approximately 6.3 times (the "Proposed Acquisition").
Listed on the Johannesburg Stock Exchange, Astrapak is a leading
South African manufacturer of rigid plastic packaging products and
components with a broad product offering across injection moulding,
blowmoulding and thermoforming technology platforms. The Company
serves industrial and consumer markets, supplying customers in
Sub-Saharan Africa. Astrapak's manufacturing footprint comprises
nine facilities in South Africa, employing approximately 1,100
people. For the year ended 28 February 2016, the Company achieved
revenues of ZAR 1.4 billion (GBP81million)(1) . Robin Moore, Chief
Executive Officer of Astrapak, will continue to lead the Astrapak
business as a stand-alone sub-division within RPC Superfos.
RPC will fund the consideration through its existing debt
facilities.
Highlights of the Proposed Acquisition
The Proposed Acquisition of Astrapak represents a strategic
opportunity to acquire a rigid plastic packaging group of scale (a
'mini RPC'), with well-established market positions, in a new
territory. The Proposed Acquisition represents an excellent fit
with RPC's Vision 2020 objective to increase its manufacturing
footprint outside Europe, and meets RPC's strict acquisition
criteria. South Africa is becoming an increasingly important market
and a combination with Astrapak will enable RPC to establish a
platform for growth in Sub-Saharan Africa, strategically
positioning RPC to expand further into selected high growth African
markets. Astrapak's skill-set is highly complementary and Astrapak
is expected to accelerate its progress with the support of the
wider RPC Group.
The Proposed Acquisition represents an excellent strategic fit
with RPC and offers significant benefits for the Group,
including:
-- Acquisition of a 'mini RPC' in South Africa with expertise
across the three core conversion processes of blowmoulding,
injection moulding and thermoforming.
-- Extension of RPC's contact with a number of its existing major international customers.
-- A scalable platform from which a further organic and
buy-and-build strategy can be initiated.
-- A strong position from which to serve the wider Sub-Saharan
Africa region as demand for plastic packaging develops over the
medium to longer term.
-- Acquisition expected to be earnings accretive from year 1
with ROCE in excess of WACC, whilst RONOA and return on sales
levels are expected to be ahead of the minimum hurdle levels of 20%
and 8% respectively.
Pim Vervaat, Chief Executive of RPC, commented:
"The acquisition of Astrapak represents an important step in
realising RPC's strategy to create a meaningful presence outside of
Europe. Astrapak's strong market position in South Africa will
complement and enhance RPC's existing operations in the region, an
increasingly important territory for us, and also offers an
exciting opportunity to develop a platform from which to serve the
high growth Sub-Saharan African market. I look forward to working
with Robin and the management team to take Astrapak to the next
stage of its strategic development."
The Proposed Acquisition will be implemented via a Scheme of
Arrangement.
The Proposed Acquisition is conditional upon obtaining certain
regulatory approvals as well as the requisite approvals being
obtained from Astrapak's ordinary and preference shareholders.
Prior to this announcement, Astrapak has secured written
irrevocable undertakings and letters of support from selected
Astrapak shareholders, representing approximately 75% of Astrapak's
issued ordinary share capital, confirming that they will vote in
favour of all resolutions required to give effect to the
transaction. The Proposed Acquisition is expected to complete in
the first quarter of 2017.
For further information, please contact:
RPC Group Plc: +44 (0)1933 410064
Pim Vervaat, Chief Executive
Simon Kesterton, Group Finance Director
Thomas Saunderson, Head of Corporate Development
Rothschild - Financial Adviser:
London: +44 (0)20 7280 0000
Charles Montgomerie
Yuri Shakhmin
South Africa: +27 (0)11 428 3700
Anthony Bayne
FTI Consulting: +44 (0)20 3727 1340
Richard Mountain
Nick Hasell
Notes
(1) Sterling and South African Rand conversions based on the
exchange rate of GBP1 : ZAR17.26
Forward looking statements
This announcement contains (or may contain) certain forward
looking statements with respect to certain of RPC's current
expectations and projections about future events. These statements,
which sometimes use words such as "anticipate", "believe",
"intend", "estimate", "expect", "forecast", "project", "hope",
"plan", "assume", "positioned", "will", "shall", "may", "aim",
"predict", "should", "continue" and words of similar meaning and/or
other similar expressions that are predictions of or indicate
future events and/or future trends, reflect RPC's beliefs and
expectations at the date of this announcement and involve a number
of risks, uncertainties and assumptions that could cause actual
results and performance to differ materially from any expected
future results or performance expressed or implied by the forward
looking statement.
Statements contained in this announcement regarding past trends
or activities should not be taken as a representation that such
trends or activities will continue in the future. The information
contained in this announcement is subject to change without notice
and, except as required by applicable law, neither RPC nor any of
its affiliates assumes any responsibility or obligation to update
publicly or review any of the forward looking statements contained
herein. You should not place undue reliance on forward looking
statements, which speak only as of the date of this
announcement.
Disclaimer
Rothschild, which is authorised by the Prudential Regulation
Authority and regulated by the Financial Conduct Authority and the
Prudential Regulation Authority in the United Kingdom, is acting
solely for RPC in relation to the Proposed Acquisition and nobody
else and will not be responsible to anyone other than RPC for
providing the protections afforded to clients of Rothschild, nor
for providing advice in relation to the Proposed Acquisition or any
other matter referred to in this announcement. Apart from the
responsibilities and liabilities, if any, which may be imposed upon
Rothschild by the Financial Services and Markets Act 2000 or the
regulatory regime established thereunder, Rothschild does not
accept any responsibility whatsoever or makes any representation or
warranty, express or implied, concerning the contents of this
announcement, including its accuracy, completeness or verification,
or concerning any other statement made or purported to be made by
it, or on its behalf, in connection with RPC or the Proposed
Acquisition, and nothing in this announcement is, or shall be
relied upon as, a promise or representation in this respect,
whether as to the past or future. Rothschild accordingly disclaims,
to the fullest extent permitted by law, all and any responsibility
and liability whether arising in tort, contract or otherwise (save
as referred to herein) which each of them might otherwise have in
respect of this announcement or any such statement.
This information is provided by RNS
The company news service from the London Stock Exchange
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