Leading United Kingdom plastics packaging firm RPC Group plc, with global operations including more than 20 plants in North America, is in preliminary discussions with U.S.-based private equity firms Apollo Global Management and Bain Capital over two possible buyout offers.
In a brief announcement Sept. 10, the Rushden, England-based packaging major said the two investment firms had until 5 p.m. Oct. 8 to make the buyout offer, but did not disclose further financial details.
The RPC statement came in response to a Bloomberg report Sept. 8, saying the leading European packaging firm was in talks with potential buyers. The report valued the company at £2.8 billion ($3.6 billion), noting a 20 percent decline in RPC's shares this year.
In an July 18 statement, RPC Chairman Jamie Pike confirmed that the company had been under pressure.
"Pressure on the company's market valuation and differing investor views on the appropriate level of leverage is constraining the group's ability to pursue some attractive opportunities for growth and your board is working to resolve this," he noted.
"In the short term, the group will prioritize cash generation and the announced disposal of our non-core businesses, with a view to generating increased capital for deployment in the business or further returns to shareholders,” Pike added.
Plastics News Europe has learned that following the announcement by Pike, RPC was approached by the two private equity firms with the buyout offer.
Following the official announcement of talks, RPC shares rose 25 percent to as high as £8.57 ($11.14) on the London Stock Exchange in early trading Sept. 10, before settling later at £8.28 ($10.76), 21 percent higher than the £6.85 ($8.90) close Sept. 7.
RPC, which has been on an acquisition trail in the past few years, saw its shares dropping starting in March 2017, following a report by Northern Trust, which accused the company of disguising structural problems with a lot of acquisitions.
Those acquisitions included an early 2017 deal to buy Letica Corp., an injection molder based in Rochester, Mich., valued at $640 million.
RPC's Letica operations include 11 plants and 1,500 employees in North America, accounting for $385 million and placing it at No. 18 in Plastics News' most recent ranking of injection molders in North America.
It also operates thermoforming, film, recycling and rotomolding operations in North America for a total of 21 sites.
RPC reported a 36.4 percent year-on-year increase in sales at £3.74 billion ($4.8 billion) for the full year in 2017, with adjusted profit before tax up 36.1 percent at £389 million ($506.9 million).
