Rpc Group Regulatory News (RPC)

13 March 2018

RPC Group Plc

Acquisition of Nordfolien GmBH

RPC Group Plc ("RPC" or "Group"), a leading international plastic products design and engineering company, today announces the acquisition of Nordfolien GmBH ("Nordfolien") for a consideration of €75 million. Nordfolien is a leading player in the design and manufacture of higher added value polythene films for both industrial and consumer packaging markets. Nordfolien has two well-invested sites in Germany and Poland, including in-house recycling capabilities, and has developed, patented and commercialised a number of innovative, market leading products. The Nordfolien management team will continue to operate the business from its current locations.

After the successful acquisition and transformation of bpi group, which is now generating a return on capital employed (ROCE) in excess of 15%, the acquisition of Nordfolien represents an important next step in growing the Group's flexibles platform. The acquisition will augment bpi's market positions in Europe, as well as providing access to higher growth geographies including Eastern Europe. Nordfolien will contribute to the Group's future growth while affording the opportunity to realise an attractive level of cost synergies, primarily from procurement and best practice exchange. Exceptional costs associated with realising these synergies are anticipated to be not material, and Nordfolien also has capacity that can be utilised by bpi for further growth without incurring additional capital expenditure. The deal is expected to be earnings enhancing in the first full year of ownership with an attractive ROCE level (well ahead of the Group's weighted average cost of capital) upon realisation of cost and revenue synergies. All RPC's strict acquisition criteria are expected to be met.

The consideration of €75 million is being funded from RPC's existing debt facilities and represents a pre-synergy EBITDA multiple of circa 7x (based on unaudited accounts to December 2017). Nordfolien is expected to report revenue of €130 million for the same period. The acquisition will not impact the share buyback programme, of up to £100m, currently being executed.

Completion of the acquisition is subject to clearance from the Polish and German competition authorities, and is expected in the first half of the financial year ending March 2019.

Commenting on the acquisition, Pim Vervaat, RPC's Chief Executive, said:

"I am delighted to welcome Nordfolien to the RPC Group. The acquisition will significantly enhance our growth platform in flexibles whilst adding further innovation capability in an attractive market segment. Participation in the ongoing consolidation of the European plastic packaging industry remains a core part of RPC's strategy, and through our focus on innovation, sustainability and operating in attractive end markets, we remain confident in continuing to grow organically through the cycle ahead of GDP."

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About RPC Group:

RPC is a leading plastic products design and engineering company for packaging and selected non-packaging markets, with over 32 innovation centres and 194 operations in 34 countries, and employs c.25,000 people. The Group develops and manufactures a diverse range of products for a wide variety of customers, including many household names, and enjoys strong market positions in many of the end-markets it serves and the geographical areas in which it operates. It uses a wide range of polymer conversion technologies in both rigid and flexible plastics manufacture, and is now one of the largest plastic converters in Europe, combining the development of innovative packaging and technical solutions for its customers with good levels of service and support.

For further information please visit: www.rpc-group.com

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