Rigid packaging producer RPC Group plc announced Dec. 16 that it has agreed to buy Danish packaging rival Superfos A/S for 240 million euros ($315 million).
Higham Ferrers-based RPC said the deal will strengthen its capabilities and competitiveness in the open-top filled injection molded packaging sector, broaden its product and geographical range, and enable it to enter into higher-growth markets.
RPC expects to benefit in particular from Superfos' presence in the Nordic countries, where RPC currently has a minimal presence, as well as its locations in the high-growth-potential markets of Turkey, Tunisia and Poland.
The Superfos business generated sales of 294.5 million euros ($411 million) and profit before non-recurring items of 52.3 million euros ($73 million) in 2009.
RPC generated sales for the fiscal year ended March 31 of £720 million ($1.15 billion) and profit of £40.9 million ($65.3 million). The acquisition is expected to close in February, subject to shareholder and regulatory approval.
This is a significant acquisition for RPC Group plc which is consistent with our strategy of growing the business organically and through acquisition. This acquisition is an excellent strategic and geographic fit, Jamie Pike, RPC chairman, said in a news release.
RPC expects to make manufacturing cost savings through the pooling of common product manufacturing and improved procurement. It predicts annual pretax cost savings of at least £10 million ($15.4 million) within the third full financial year of ownership.
Superfos, of Taastrup, Denmark, is one of Europe's leading injection molders of rigid plastics packaging. Currently owned by two Nordic private equity firms -– IK Investment Partners and Ratos AB -– Superfos has nine production sites across the Nordic region, France, Poland, Spain, Belgium and the United Kingdom. It processes about 220 million pounds of plastics annually.
RPC makes injection molded, thermoformed and blow molded packaging. Injection molding accounted for sales of £303.5 million ($484 million) and thermoforming for £264.5 million ($422 million) in RPC's most recent fiscal year.
Both companies are major players in the European rigid plastics packaging sector. RPC Group ranked second in sales in the European Plastics News 2010 Rigid Plastics Packaging Producer data report; Superfos ranked No. 7.
The combined sales of RPC and Superfos will still fall short of European rigid packaging sector leader Alpla-Werke Alwin Lehner GmbH & Co. KG of Hard, Austria.
However, the merged company will be the continent's largest producer of injection molded plastic packaging containers and one of the largest in that business sector worldwide.