UPDATED: The buying spree continues, and this time RPC Group plc is bulking up in the United States with a deal for Letica Corp.
A deal valued at up to $640 million adds 13 plants that make rigid plastic packaging and foodservice products and 1,750 employees. They will join five existing RPC facilities in the United States.
RPC has now made deals for six companies just since the end of September.
Letica, based in Rochester, Mich., helps propel RPC deeper in to the United States as CEO Pim Vervaat continues to push the company’s growth strategy outside of Europe.
It was less than three years ago that Vervaat sat in a small conference room at the company’s manufacturing site in Morgantown, a small town in eastern Pennsylvania, and shared some of his vision for RPC’s growth in the United States.
“We’re not in it to become the biggest packaging company in the world. We’re not in it to become the biggest packaging company in the U.S. But we do have certain capabilities where we can follow our customers sensibly into the U.S.,” he said at the time.
“We are thinking that the U.S. is quite important for us,” Vervaat said when the company was unveiling a $10 million expansion of the site.
Letica, which will be a stand-alone business within RPC’s Superfos division, brings $450 million in annual sales to RPC and adjusted earnings before interest, taxes, depreciation and amortization of $57 million. RPC is paying an earnings multiple of 8.5 as $490 million will be paid to shareholders initially. The deal also includes an ability to earn another $150 million based on the company’s future profit.
“The acquisition of Letica provides a unique opportunity to further extend RPC’s geographical reach into the attractive North American market through Letica’s strong and well-invested manufacturing footprint,” Vervaat said in a statement. “We are excited to be able to develop an enhanced platform of scale to support continued organic and inorganic growth in the United States.”
RPC already has identified $12 million in annual savings by purchasing Letica, which has its locations in nine states.
Letica makes products a variety of ways, including injection molding, thermoforming and sheet extrusion. The company’s foodservice packaging business includes both plastic and paper products.
CEO Anton Letica and Vice President of Operations Mara Letica will stay with the company at least until the end of the company’s current financial period to help with transition and customer relationships, RPC said.
Letica ranked 16th on Plastics News most recent survey of North American injection molders. RPC ranked No. 2 in Plastics News Europe’s most recent listing of Europe’s top rigid plastics packaging producers.