14th Mar 2008 16:01
Plastics Capital PLC14 March 2008 For Immediate Release 14 March 2008 Plastics Capital Plc ("Plastics Capital" or the "Company") Acquisition of Palagan Limited ("Palagan") Plastics Capital Plc (AIM;PLA), a fast-growing acquisitive plastics productsmanufacturer focused on proprietary products for niche markets, is pleased toannounce the acquisition of Palagan and its associated companies, located inDunstable, Bedfordshire, for total consideration of £6.4m. The acquisition isbeing funded from Plastics Capital's existing cash resources together with anincrease in senior debt facilities from Royal Bank of Scotland, whilst £0.5m ofthe consideration will be deferred for 2 years. Palagan is a long established producer of high performance film packagingsolutions. Palagan customises its products to between 4,000 and 5,000 differentspecifications. The ability to tailor products to customers' requirements andturn design solutions into in-line automated production is a key success factorand accounts for Palagan's marketplace success. Turnover for the year ended 30 October 2007 is £8.8 million. Sales haveincreased at a rate of 6.4% p.a. over the last seven years. In the financialyear to 30 October 2007, Palagan had audited EBITDA of £1.07m - these accountsincluded certain costs that would not be continuing under Plastics Capital'sownership. Net assets acquired amount to £3.5m at completion. Palagan employs 40staff and has a customer base of 500, with the largest customer accounting for4.5% of sales. The Board of Plastics Capital intends to continue operating Palagan as a standalone subsidiary of the Company. The current owner and founder, Graham Taylor,will be retiring, but the business has an ambitious and capable management teamwho will continue to operate Palagan as part of Plastics Capital. Since its interim results reported in December, Plastics Capital has traded inline with expectations. Certain adjustments have been made to therationalisation programme relating to the integration of Channel and Trimplex,but the net financial impact of this is expected to be neutral. Also, the recentstrengthening of the Euro will, if it continues, lead to a translation loss at31 March year end, but due to the Group's hedging strategy there will be acompensating benefit for trading performance in the medium term. Faisal Rahmatallah, Chairman and Chief Executive, commented: "This is an exciting acquisition for Plastics Capital. It is a profitablebusiness with strong organic growth and an attractive acquisition multiple. Weexpect the acquisition to be earnings enhancing in the first year. The filmpackaging market is full of opportunity for a flexible, innovative andtechnically adept manufacturer like Palagan. The acquisition fits our strategyas explained at IPO and is in line with our strategy of being a fast-growing andacquisitive Group." For further information, please contact: Plastics Capital 0207 326 8423Faisal Rahmatallah / Nick Ball Cenkos Securities plcStephen Keys / Elizabeth Bowman 020 7397 8924 Buchanan Communications 0207 466 5000Richard Darby / Susanna Gale / Christian Goodbody Notes to Editors Plastics Capital successfully floated on AIM on 3 December 2007 and undertook ashare for share exchange to acquire Plastics Capital Trading Limited with itssubsidiary undertakings on 6 December 2007. Plastics Capital is a consolidator of plastics products manufacturers focused onproprietary products for niche markets. The Group has factories in the UK, anassembly operation in Thailand and sales offices in the US and Japan.Approximately 70 per cent. of sales are exported to countries worldwide.Production is concentrated in the UK where significant engineering know-how andautomation underpins the Group's competitiveness. Further information can be found on www.plasticscapital.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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