RPC Group PLC Proposed Acquisition of ESE World B.V. (8942R)

TIDMRPC

RNS Number : 8942R

RPC Group PLC

15 December 2016

15 December 2016

RPC Group Plc

Proposed Acquisition of ESE World B.V.

RPC Group Plc ("RPC"), a leading international design and engineering company of plastic products for both packaging and non-packaging markets, today announces its proposed acquisition of ESE World B.V. ("ESE" or the "Company") from Stirling Square Capital Partners for a consideration of EUR262.5 million subject to customary adjustments (the "Proposed Acquisition").

ESE is Europe's largest "pure play" temporary waste storage solutions provider with well-known regional and pan-European brands. The Company services a broad customer base ranging from local municipalities to private waste service providers. ESE's manufacturing footprint comprises one facility in Germany and one in France, in addition ESE has one R&D centre in Germany. Overall the Company employs approximately 600 full time employees. For the year ending 31 December 2016, the Company is expecting to achieve revenues in excess of EUR200 million whilst consuming circa 45kt of polymers. Björn Hedenström, Chief Executive Officer of ESE, will continue to lead the business which will be an independent business unit within the RPC Promens division going forward.

RPC will fund the consideration through its existing debt facilities.

Highlights of the Proposed Acquisition

The Proposed Acquisition of ESE represents a strategic opportunity to enter into a high added value polymer consuming segment in a stable and growing European market, with good management and well-established market positions supported by industry recognised branded products. The Proposed Acquisition represents an excellent fit with RPC's Vision 2020, meeting RPC's strict acquisition criteria and building on RPC's successful acquisition history in Europe. Other highlights of the Proposed Acquisition include:

-- Strategic opportunity to acquire an established growth platform in the European waste storage solutions market.

   --      Acquisition of a complementary business to RPC's existing materials handling business. 
   --      Enhances the Group's overall polymer procurement position. 
   --      Provides an enlarged platform to generate cost, purchasing and efficiency savings. 

-- Acquisition expected to be earnings accretive from year 1 with ROCE in excess of WACC, whilst RONOA and return of sales levels are expected to be comfortably ahead of the minimum hurdle levels of 20% and 8% respectively.

Pim Vervaat, Chief Executive of RPC, commented:

"The acquisition of ESE provides yet another good opportunity for RPC to expand its product offering with a quality growth platform in Europe. The combination will further enhance the Group's overall scale creating good opportunities for procurement and efficiency synergies. I look forward to working with Björn and the management team to take ESE to the next stage of its strategic development."

The Proposed Acquisition is conditional upon obtaining certain regulatory approvals from competition authorities in certain jurisdictions and is expected to complete in the first quarter of 2017.

 
 For further information, please contact: 
 
 RPC Group Plc:                                       [phone] 
 Pim Vervaat, Chief Executive 
 Simon Kesterton, Group Finance Director 
  Thomas Saunderson, Head of Corporate Development 
 
 Rothschild - Financial Adviser:                      [phone] 
 Charles Montgomerie 
  Yuri Shakhmin 
 
 FTI Consulting:                                      [phone] 
 Richard Mountain 
  Nick Hasell 
 

Forward looking statements

This announcement contains (or may contain) certain forward looking statements with respect to certain of RPC's current expectations and projections about future events. These statements, which sometimes use words such as "anticipate", "believe", "intend", "estimate", "expect", "forecast", "project", "hope", "plan", "assume", "positioned", "will", "shall", "may", "aim", "predict", "should", "continue" and words of similar meaning and/or other similar expressions that are predictions of or indicate future events and/or future trends, reflect RPC's beliefs and expectations at the date of this announcement and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward looking statement.

Statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this announcement is subject to change without notice and, except as required by applicable law, neither RPC nor any of its affiliates assumes any responsibility or obligation to update publicly or review any of the forward looking statements contained herein. You should not place undue reliance on forward looking statements, which speak only as of the date of this announcement.

Disclaimer

Rothschild, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting solely for RPC in relation to the Proposed Acquisition and nobody else and will not be responsible to anyone other than RPC for providing the protections afforded to clients of Rothschild, nor for providing advice in relation to the Proposed Acquisition or any other matter referred to in this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed upon Rothschild by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, Rothschild does not accept any responsibility whatsoever or makes any representation or warranty, express or implied, concerning the contents of this announcement, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by it, or on its behalf, in connection with RPC or the Proposed Acquisition, and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. Rothschild accordingly disclaims, to the fullest extent permitted by law, all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to herein) which each of them might otherwise have in respect of this announcement or any such statement.

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December 15, 2016 02:00 ET (07:00 GMT)