Berry Global Group Inc. is acquiring RPC Group plc in a blockbuster $4.37 billion, all-cash deal that trumps an earlier purchase attempt by a private equity firm.
RPC, with 153 manufacturing sites in 33 countries, brings about 25,000 employees to Berry's existing workforce of about 23,000.
The move combines Berry's concentration of business in North America with RPC's concentration in Europe and provides a global plastic packaging platform for even more expansion in the future, CEO Tom Salmon said.
"We believe this highly strategic move puts us in a better long-term position from an industry and competitive perspective. RPC helps us achieve balance across geographies, markets and substrates," Salmon said on a March 8 conference call to discuss the deal.
"The combination is truly a global M&A platform, allowing us to maximize the collective strength of both organizations, providing for additional growth opportunities that were previously less actionable for us," Salmon said.
While Evansville, Ind.-based Berry has taken some rather big swings in the mergers and acquisitions market in recent years, the move for RPC is the company's largest ever.
Berry has a decades-long history of growing through acquisitions and prides itself on its abilities to acquire and integrate new operations.
RPC's decision to accept Berry's offer trumps an earlier attempt by Apollo Management Group LLC, a private equity firm, to acquire RPC, based in Rushden, England. Apollo previously had made what it termed a final offer for RPC that was accepted. But the use of the word "final" in Apollo's offer has specific meaning in United Kingdom regulatory language and precluded Apollo from upping its offer.
This gave Berry an opportunity to interject itself once RPC was in play and decide whether to make a run for the company. Berry was facing a March 13 deadline to make its intentions known when announcing the deal March 8.
Berry, thanks to dozens of acquisitions over time, has grown into a company with $8.1 billion in expected sales this year prior to the propose acquisition. RPC will add another $4.8 billion in annual sales to bring the combined total to about $13 billion. RPC posted earnings before interest, tax, depreciation and amortization of $768 million for the fiscal year ended Sept. 30.