UK-based RPC Group will acquire French closures and dispensing systems manufacturer GCS Group for €650m in a bid to bolster its position in European plastic packaging market.
RPC proposes to fund the acquisition by combining equity and debt and through drawings on its existing revolving credit facility.
Upon completion of the deal, RPC will pay €186m to the sellers, GCS as well as the holding company Financière Daunou.
According to RPC, the acquisition will allow the company to offer closure solutions alongside its existing packaging product offering.
Further, the footprint of GCS in Europe alongside a foothold in Asia, US and Latin America is complementary to RPC's and is expected to create possibilities for better combined growth.
Following the acquisition, RPC will also benefit from product diversification, a broadened customer base as well as an enlarged platform and extend its reach in several niche end-markets.
The GCS product range of closures and dispensing systems will enable RPC to better serve its customers and allow it to provide a combined containers and closures solution on a global basis.
RPC Group chief executive Pim Vervaat said: "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.
"The combination will further strengthen RPC's European platform in rigid plastic packaging, with our enhanced scale creating significant opportunities for procurement and efficiency synergies whilst providing additional platforms for growth outside Europe."
The acquisition is expected to close by the end of March 2016.
RPC currently purchases about 475,000t of polymer a year, mainly in Western Europe, while GCS buys about 135,000t of polymer per year.
GCS reported revenues of €590.5m and EBITDA of €82.8m for the year ended 31 December 2014.
Image: GCS Group product range of closures and dispensing systems will enable RPC to better serve its customers. Photo: courtesy of jk1991/FreeDigitalPhotos.net
