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RPC back in the buyers' circle

The diversified plastics product group is back on the acquisition trail within two months of the deal to capture ESE World BV from private equity firm Stirling Square Capital Partners
February 9, 2017

RPC Group (RPC) is to expand its geographic footprint through the acquisition of US plastics manufacturer Letica Group for an upfront consideration of $490m (£391m), rising to a maximum of $640m, including earn-out provisions. If the full earn-out provisions are brought to bear, the amount will represent 6.4 times Letica's average adjusted cash profits for the year ended 30 June 2016.

IC TIP: Buy at 1039p

The deal, which is subject to approval from the US Federal Trade Commission and the Department of Justice, is expected to complete by the end of March, and will be funded by a fully underwritten one-for-four rights issue at a price of 665p, raising gross proceeds of approximately £552m.