Speaking about the acquisition, Nick Mockett, head of Packaging M&A, Moorgate Capital told DairyReporter, RPC has been a major consolidator having bought its two main rivals Superfos and Promens in recent years.
Unterland and Mondi
“By acquiring BPI it is to a degree emulating the strategy of Berry and Coveris (which acquired Unterland from Mondi) to supply the market with its sophisticated rigid packaging products and film,” he said.
“In food production polyethylene film is a vital ingredient. BPI is the European film leader supplying a range of markets throughout the food supply chain.
“At one end, in the agri films sector BPI is the number one supplier with well known brands in silage film, including multilayer stretch film, which is important in the production of beef and dairy products. The agricultural films sector is growing at over 7% globally.
“At the other end of the food supply chain its food films protect the food from the packer to the retailer to the end consumer. BPI supplies film to packaging manufacturers to convert into packaging.
“The macro fundamentals of these segments are strong with rising global populations and burgeoning middle classes demanding more food and protein in particular.
“With any public company takeover, even with a recommended offer the possibility of an interloper making a rival bid cannot be ruled out. (As with the Dow DuPont deal).”
The RPC deal will be funded by a cash and share offer. RPC will offer existing BPI shareholders 470p for every BPI share together with 0.60141 of an RPC share and the firm is placing new shares on the market to raise approximately £90m ($127m) to part fund the acquisition.
Vision 2020 strategy
Pim Vervaat, CEO, RPC, said BPI was an excellent fit with its Vision 2020 strategy, focused on selective consolidation in Europe, and a ‘strategic opportunity to acquire an established flexibles platform in the European polythene films market with strong market positions.’
Other factors included an entry into an adjacent polymer-consuming market “and increasing the range of polymer conversion technologies within RPC, in line with other global players,” plus an opportunity to pursue what it called a “parallel buy-and-build strategy in flexibles alongside RPC's existing strategy in rigids.”
According to Cameron McLatchie, chairman, BPI, RPC recognized the value of his firm, its recent trading performance and future prospects, by making an offer “at an attractive premium to the share price."
“BPI’s business should benefit from the ability of a larger group to expand its footprint in Europe and beyond. Shareholders will benefit from enhanced liquidity for their investment, and employees will have access to the opportunities available in a larger group,” he added.
The deal is the latest in a string of acquisitions RPC has made in the past year. It acquired French bottle-top maker Global Closures Systems Group in March for €650m ($728.8m), and bought four other companies during the year.
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