14th Dec 2015 07:40
LONDON (Alliance News) - RPC Group PLC on Monday launched a fully underwritten rights issue to raise GBP232.6 million to help fund the acquisition of Global Closure Systems from private equity firm PAI Partners, in a move to strengthen the packaging maker's position in Europe and beyond.
RPC, which supplies rigid plastics packaging products and plastic containers, is acquiring the plastic closures and dispensing systems specialist for an enterprise value of EUR650.0 million, equivalent to about GBP470.0 million, on a cash-free, debt-free basis.
That values France's GCS at 6.8 times its earnings before interest, tax, depreciation and amortisation in the 12 months ended September 30. On completion of the deal, RPC will pay EUR186.0 million to the sellers of GCS.
The cash deal will be funded through a combination of debt and RPC equity, in the form of the one-for-five rights issue, with up to 50.6 million new shares to be issued at 460.0 pence each. RPC shares closed at 764.00p on Friday. The rights price represents a 40% discount on Friday's price and an 35% discount taking into account the enlarged share base and other items.
The debt component of the financing arrangements means that RPC's revolving credit facility has been increased to GBP770.0 million from GBP490.0 million.
RPC said the rights issue and acquisition are expected to boost the combined group's earnings per share in the first full year of ownership following the acquisition.
"The combination will further strengthen RPC's European platform in rigid plastic packaging, with our enhanced scale creating significant opportunities for procurement and efficiency synergies whilst providing additional platforms for growth outside Europe," RPC Chief Executive Pim Vervaat said in a statement.
By Samuel Agini; [email protected]; @samuelagini
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