December 14, 2015 Updated 12/14/2015
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PRW
Packaging giant RPC Group plc is set to significantly extend its global presence after it announced plans to buy Global Closure Systems for 650 million euros ($ 714.6 million).
The deal will combine two of the largest injection molders in Europe. But in its announcement, RPC highlighted how it will reinforce its presence beyond Europe, and extend its reach in niche closure markets.
“The proposed acquisition of GCS Group provides a compelling opportunity for RPC to expand its product offering with an extensive range of highly complementary closure and dispensing solutions and technologies,” said RPC chief executive Pim Vervaat, in a news release.
The deal, which is subject to shareholder and regulatory approval, is scheduled to be complete by the end of March.
RPC is buying Saint Cloud, France-based GCS from PAI Partners SAS, a French investment firm. GCS was created in 2005 with the spinoff of Crown Holdings Inc.’s beverage and specialty closure business. Since then the company has grown organically and through acquisition. For the year ended Dec. 31, 2014, GCS posted sales of 590.5 million euros and earnings before interest, taxes, depreciation and amortization of 82.8 million euros.
RPC said the acquisition will create a significantly enhanced European platform in rigid plastic packaging and should net cost savings of around 15 million euros a year.
GCS is the 14th largest injection molder in Europe, according to Plastics News Europe, with estimated molding sales in the region of 440 million euros. The company has 23 global production sites, according to the ranking, including 18 in Europe.
Outside Europe, GCS has manufacturing plants in the United States, Mexico, Thailand, the Philippines and China.
RPC, which is based in Rushden, England, is publicly traded on the London Stock Exchange. The company is a major injection molder — it was No. 8 on Plastics News Europe’s regional ranking — but also is a significant blow molder and rotational molder. PNE ranks RPC as the No. 2 rigid packaging company in Europe.
Resin purchasing synergy
The acquisition will improve RPC’s polymer-buying capabilities, the company said in its announcement. The group said it currently buys 475,000 metric tons of resins annually, alongside GCS’ 135,000 metric tons.
The enlarged group’s polymer consumption was expected to equate to around 6 percent of the total output of polymers for rigid plastic packaging in Western Europe.
Once the deal was completed, RPC said it would centralize polymer buying, rolling out what it called its own “optimized purchasing strategy.”
RPC said the majority of the 15 million euros in annual synergies that the deal will unlock are related to polymer purchasing and other areas of procurement, particularly in Europe.
