Proposed Acquisition of British Polythene Industries PLC - RPC Group Plc - Outlook
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
RPC Group Plc
Proposed Acquisition of BPI
June 2016
RPC Group Plc
Proposed Acquisition of
British Polythene Industries PLC
101RPC Group Plc
Proposed Acquisition of BPI
Disclaimer
Important Notice
THIS PRESENTATION (AND THE INFORMATION CONTAINED HEREIN) IS NOT FOR RELEASE, PUBLICATION, DISTRIBUTION OR FORWARDING, DIRECTL Y OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM AUSTRALIA, CANADA,
JAPAN, T HE REPUBLIC OF SOUT H AFRICA, THE UNITED ST ATES OF AMERICA OR ANY OTHER JURISDICTION WHERE T O DO SO WOULD CONSTITUT E A VIOLAT ION OF T HE RELEVANT LAWS OF SUCH JURISDICT ION.
This presentation has been prepared and issued by, and is the sole responsibility of, RPC Group Plc (the “Company” or “RPC”) and is being delivered in connection with the proposed offer by the Company for the entire issued and to be issued share c apital of British Polythene Industries
PLC (“BPI”) (the “Transaction”). For the purposes of this notice, the presentation that follows shall mean and include the slides that follow, the oral pr esentation of the slides by the Company, the question-and-answ er session that follows that oral presentation, hard copies of this document
and any materials distributed at, or in connection with, that presentation. Terms defined in the announcement of the Transact ion dated 9 June 2016 shall have the same meaning when used in this notice.
This presentation is being supplied to you solely for your information and does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or solicitation or any offer to buy or subscribe for or otherwise acquire, any securities of the Company in any
jurisdiction pursuant to the Transaction or otherwise. This presentation does not constitute a prospectus or prospectus equiv alent document.
This presentation and the materials distributed in connection with this presentation are not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction in which such distribution, publication,
availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction, including, but not limited to, the United States, Canada, Australia, Japan or South Africa. Any failure to comply with these restrictions may constitute a violation
of the securities laws of any such jurisdiction. Any person into whose possession this presentation comes should inform themselves about, and observe, any such restrictions. The Company does not intend to make any public offering of securities in the United States.
In the United States, this presentation is directed only at persons who are qualified institutional buyers (“QIBs”) as defined in Rule 144A of the US Securities Act of 1933 (the “US Securities Act”). In the United Kingdom, this presentation is directed only at (i) persons who have professional
experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order or to those persons to whom it can ot herwise
lawfully be distributed (each a “Relevant Person”). This presentation must not be acted or relied upon by persons other than Relevant Persons. In member states of the European Economic Area (the “EEA”) other than the United Kingdom, this presentation is directly only at “qualified
investors” within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC as amended, including by EU Directive 2010/73/EU to the extent implemented in the relevant member state (the “Prospectus Directive”)).
This presentation is confidential and may not be reproduced, redistributed or forwarded, directly or indirectly, to any other pers on or published, in whole or in part, for any purpose. The information contained in this presentation has not been independently verified. Neither the Company nor, N
M Rothschild & Sons Limited (“Rothschild”), Deutsche Bank AG, London Branch (“Deutsche Bank”) or Panmure Gordon (UK) Limited (“Panmure Gordon”) (Rothschild, Deutsche Bank and Panmure Gordon collectively, the “Banks”) nor any of their parent or subsidiary undertakings, or the
subsidiary undertaking of any such parent undertakings, or any of such person’s respective partners, shareholders, directors, officers, affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any information or
opinions presented or contained in this presentation nor shall they accept any responsibility whatsoever for, or make any representation or warranty, express or implied, as to the truth, fullness, accuracy or completeness of the information in this pres entation (or whether any information has
been omitted from the presentation) or any other information relating to the Company, its subsidiaries or associated companies, in any form whatsoever, howsoever transmitted or made available or for any loss howsoever arising from any use of this presentation or its contents or otherwise
arising in connection therewith.
The information and opinions presented or contained in this presentation (including forward-looking statements) speak as of the date hereof (unless otherwise stated) and are subject to updating, revision, verification and amendment without notice and such information may change materially.
Neither the Company nor the Banks nor their affiliates nor their advisers are under an obligation to correct, update or keep current the information contained in this presentation or to publicly announce or inform you of the result of any revision to the statements made herein except where they
would be required to do so under applicable law. This presentation is made on the express understanding that it does not cont ain all information that may be required to evaluable the Company. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on
in connection with, any contract or commitment or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of the Company. The information and opinions in this presentation are not based upon a consideration of your particular investment
objectives, financial situation or needs. This presentation does not constitute an audit or due diligence review and should not be construed as such nor has it been approved by any regulatory or supervisory body. You must make y our own independent assessment and investigations as you
deem necessary. You may wish to seek independent legal, regulatory, accounting, tax and such professional advice as appropriate with regards to the contents of this presentation.
102
Matters discussed in this presentation may constitute forward-looking statements that reflect management’s current views with respect to future events and financial and operational performance. Forward-looking statements include statements concerning plans, object ives, goals, strategies,
future events or performance and underlying assumptions and other statements which are other than statements of historical facts. The words “believe”, “expect”, “anticipate”, “intend”, “estimate”, “forecast”, “project”, “will”, “may”, “should” and similar expressions identify forward-looking
statements. Others can be identified from the context in which they are made. These forward-looking statements involve various assumptions, known and unknown risks, uncertainties, estimates and other factors which are beyond the Company's control and which may cause actual results or
performance to differ materially from those expressed or implied from such forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such statements. Past performance of the Company cannot be relied on as a guide to future performance. Accordingly, you should not place undue reliance on forward-looking statements due to the inherent uncertainty therein.
Other than the Quantified Financial Benefits Statement, no statement in this presentation is intended as a profit forecast or estim ate for any period and no statement in this presentation should be interpreted to mean that earnings or earnings per ordinary share for RPC or BPI respectively for
the current or future financial years would necessarily match or exceed the historical published earnings or earnings per ordinary share for RPC or BPI respectively.
To the extent available, the industry, market and competitive position data contained in this presentation come from official or third party sources. The Company has not independently verified the data contained therein and there is no guarantee of the acc uracy or completeness of such data.
In addition, certain of the industry, market and competitive position data contained in this presentation come from the Company's own internal research and estimates based on the knowledge and experience of the Company's management in the markets in which the Company operates.
While the Company believes, acting in good faith, that such research and estimates are reasonable and reliable, they, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change. Accordingly,
you should not place reliance on any of the industry, market or competitive position data contained in this presentation.
The statements in the Quantified Financial Benefits Statement relate to future actions and circumstances which, by their nature, involve risks, uncertainties and contingencies. As a result, the synergies and cost savings referred to may not be achieved, or may be achieved later or sooner than
estimated, or those achieved could be materially different from those estimated. Neither these statements nor any other statement in this presentation should be construed as a profit forecast or interpreted to mean that the Combined Group's earnings in the first full year following
implementation of the Transaction, or in any subsequent period, would necessarily match or be greater than or be less than those of RPC and/or BPI for the relevant preceding financial period or any other period. For the purposes of Rule 28 of the Takeover Code, the Quantified Financial
Benefits Statement contained in this presentation is the responsibility of RPC and the RPC Directors.
Deutsche Bank AG is authorised under German Banking Law (competent authority: BaFIN – Federal Financial Supervisory Authority). Deutsche Bank AG, London Branch is further authorised by the Prudential Regulation Authority (the “PRA”) and is subject to limited regulation by the FCA
and PRA. Rothschild is authorised and regulated in the United Kingdom by the Financial Conduct Authority (the “FCA”) and the PRA. Panmure Gordon is regulated in the United Kingdom by the FCA. The Banks, are acting exclusively for the Company and no one else. None of the Banks will
regard any other person (whether or not a recipient of this presentation) as a client and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients nor for providing advice in relation to this presentation or any transaction,
arrangement or other matter referred to in this presentation. Apart from the responsibilities and liabilities, if any, which may be imposed on the Banks by the Financial Services and Markets Act 2000 (as amended) or the regulatory regime established thereunder, or under the regulatory regime
of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, the Banks disclaim all and any responsibility or liability, whether arising in tort, contract or otherwise, which they might otherwise have in respect of this presentation.
Note to US investors
The Offer relates to the shares of a UK company and it is proposed to be made by means of a scheme of arrangement provided for under the laws of England and Wales. The Scheme will relate to the shares of a UK company that is a “foreign private issuer” as def ined under Rule 3b-4 under
the US Exchange Act. A transaction effected by means of a scheme of arrangement is not subject to the shareholder vote, proxy solicitation and tender offer rules under the US Exchange Act. Accordingly, the Scheme is subject to the disclosure requirement s and practices applicable in the
UK to schemes of arrangement, which differ from the disclosure requirements and practices of US shareholder vote, proxy solicitation and tender offer rules.
By attending and otherwise accessing this presentation, you warrant, represent, undertake and acknowledge that (i) you have read and agree to comply with the foregoing limitations and restrictions including, without limitation, the obligation to keep this presentation and its contents
confidential, (ii) you are able to receive this presentation without contravention of any applicable legal or regulatory rest rictions, (iii) if you are in the United States, you are a QIB, (iv) if you are in a member state of the EEA (other than the United Kingdom), you are a “qualified investor” and (v)
if you are in the United Kingdom, you are a Relevant Person.
Further information, including all documents related to the proposed Transaction, can be found at: www.rpc-group.com.RPC Group Plc
Proposed Acquisition of BPI
Transaction summary
Compelling strategic acquisition in line with our Vision 2020
● Recommended cash and share offer
● Price of 940p1 per share (30% premium2) representing an implied offer value of £261m (fully diluted)
Transaction
– BPI shareholders to receive 470p in cash and 0.601411,3 of a New RPC Share for each BPI share held
– BPI shareholders will own c.5% of the enlarged group post transaction
● Enterprise value of £283m, excluding pensions and minorities, 6.1x 4 multiple on adjusted Dec 2015 EBITDA of £46.6m 5
– RPC to assume net pension deficit of BPI of £47.6m (post-tax)
● Excellent fit with Vision 2020 strategy – selective consolidation in Europe
● Unique strategic opportunity to acquire an established flexibles platform in the European polythene films market with
strong market positions
● Entry into an adjacent polymer consuming market and increasing the range of polymer conversion technologies within
the Group – in line with other global players 103
Strategic
● Opportunity to pursue a parallel buy-and-build strategy in flexibles alongside RPC’s existing strategy in rigids
rationale
● Enhances the Group’s longer term overall polymer buying position
● Meets RPC’s strict acquisition criteria
● Enlarged platform to generate cost, purchasing and efficiency savings
– Estimated pre-tax cost synergies of £10m per annum, fully realisable by the second full financial year
● EPS accretive within the first full financial year, materially accretive within the second full financial year
● Cash element financed via a mix of debt and equity
Financing ● Fully underwritten placing of c. £90m (c.4% of issued share capital)
● Expected enlarged group opening leverage of c. 2.1x net debt6 / LTM EBITDA as at 31 March 2016
Notes
1. Based on RPC 1 month share price average up to 8 June 2016 of 781.5p.
2. Based on BPI ref erence share price of 725.0p
3. Ratio could be adjusted for final dividend to 0.61102 if completion is past ex div date
4. Including pensions and minorities: multiple of 7.1x based on adjusted EBITDA and 7.6x multiple based on reported EBITDA of £43.6m.
5. BPI reported EBITDA 2015 before restructuring of £43.6m adjusted for: plus £2.0m exceptional polymer impact plus £1.9m of reduced energy costs and provision movement less £0.9m contribution
f rom discontinued Chinese BPI subsidiary
6. BPI net debt based on reported Dec 2015 net debt of £32.1m adjusted for proceeds from discontinued Chinese BPI subsidiary of £9.7mRPC Group Plc
Proposed Acquisition of BPI
Business overview BPI
Profile of BPI
BPI is a leading manufacturer and supplier of polythene films for a diverse range of end
markets, including agriculture and horticulture, construction, industrial, healthcare and
waste services and food & non-food retail
● Leading brands based upon innovative multi-layer films
● Global leader in silage stretch films, strong positions in the industrial and consumer films
market
● Proven ability to innovate through development of new, added value products
● Supplies c. 275,000 tonnes of polythene films each year for a diverse range of everyday
applications 104
● One of the largest recyclers of waste polythene films in Europe; recycling c. 65,000 tonnes
annually
● Operates through 19 manufacturing facilities across the UK, Europe and North America
− 55% of 2015 sales by destination were in the UK
● As of December 2015 the company employed c. 2,000 people
● Listed on the main market of the London Stock Exchange
● Headquartered in Greenock (Scotland), UK
● Adjusted sales of £464m1 and adjusted EBITDA of £46.6m1 in 2015
Source: Company information
Notes
1. BPI reported sales 2015 of £468.3m less £4.7m sales from discontinued Chinese BPI subsidiary . BPI reported EBITDA 2015 before restructuring of £43.6m adjusted for: plus £2.0m exceptional
poly mer impact plus £1.9m of reduced energy costs and provision movement less £0.9m contribution from discontinued Chinese BPI subsidiaryRPC Group Plc
Proposed Acquisition of BPI
Business overview BPI
Overview of end market sectors
Group Agriculture and Retail Food Healthcare and
Construction Industrial Non-Food Retail
Horticulture Chain Waste Serv ices
Share of sales FY2015
1
14% 13% 8% 6%
Total reported sales: £468m 32% 27%
£150m £126m £66m £61m £37m £28m
• Silage products • Bakery packaging • Gas protection systems • Container liners • Refuse sacks • Mailing bags and garment
Products
• Greenhouse films • Frozen food packaging • Structural waterproofing • Heavy duty sacks • Clinical waste sacks film
• Polytunnel covers • Shrink film for cans and • Protection films • Pallet protection • Recycling bags • Mailing film
• Consumer packaging for bottles • Ventilated cement sacks • Form fill seal films • Caddy liners • Transit packaging
retail horticulture • Fresh produce packaging • Overwrap films for insulation • Aprons • Protective films
• Animal feed packaging
• Fertiliser packaging
• Refuse sacks
• Transit packaging
• Packaging for aggregate,
bricks and blocks
• Heavy duty refuse sacks 105
Brands
Sample products
Selected customers
Source: Company information
Notes
1 Includes revenues from BPI China subsidiary (disposed of in April 2016, £4.7m external sales)RPC Group Plc
Proposed Acquisition of BPI
Business overview BPI
Diversified business
Overview: Well balanced product mix: Diversified revenue base:
● Broad portfolio of customers spread 2015 Sales by product1 2015 Sales by destination1
across a wide range of market Recycled
sectors and geographical regions North Others²
£76m
16% America 8%
− Supplies customers in over 50 5%
Scandinavia
countries 5%
− Top 10 customers 16% of sales Films Germany 106
£212m 5%
● Top customer represents c. 3% of 45% UK
sales France 55%
6%
● Large global blue chip companies
and smaller local players Converted Benelux
£181m 13%
● Strong, long-standing relationships 39% Ireland
with key customers 4%
Outside the UK &
● Focuses on markets with organic Ireland
growth outlook of at least GDP Films: Plain film on the reel products 42%
Converted: Printed and/or converted products
growth Recycled: Products manufactured from recycled polythene scrap
Source: Company information
Notes
1 Includes revenues from discontinued Chinese BPI subsidiary
2 Others includes New Zealand, Australia, Japan and South AmericaRPC Group Plc
Proposed Acquisition of BPI
Business overview BPI
European focus
UK & Ireland (65% of 2015 sales) North Am erican m anufacturing sites European m anufacturing sites
● 14 manufacturing facilities in the UK
● Market leading positions in the UK, across:
− Silage stretch films / silage sheet
− Industrial and consumer packaging
− Recycled film products for construction and refuse sacks
− Shrink and convertor films
Mainland European m anufacturing netw ork (29% of 2015 sales)
● 2 manufacturing facilities in Belgium and 1 in the Netherlands
● Market leading positions in Benelux, across: 107
− Form fill seal films
− Heavy duty sacks
− Silage stretch films
− Printed film for the food industry
● Sales operations in France
North Am erica (6% of 2015 sales)
● 2 manufacturing facilities in Alberta, Canada (agriculture and horticulture focus)
● Market leading position in silage and grain bags, silage sheet and horticultural films
Manufacturing sites Headquarters
Source: Company informationRPC Group Plc
Proposed Acquisition of BPI
Business overview BPI
Strong historical financial track record
Operating profit (£m, Dec y/e)
40
● BPI has continued to invest through the cycle to
achieve efficiencies and lower operating costs
30
20
− Closures of Widnes and Sevenoaks announced
10 ● BPI has improved the quality of its business by
0
cutting out unprofitable and low margin sales
2012A 2013A 2014A 2015A 108
Adjusted EPS (p, Dec y/e) ● Operating profit CAGR of c. 10% over last 5 years
100
80 ● Adjusted EPS CAGR of c. 11.5%
60
40
− Up by 73% to 76.6p over 5 years
20
0
2012A 2013A 2014A 2015A
BPI focusing on added value markets whilst optimising its UK cost baseRPC Group Plc
Proposed Acquisition of BPI
Business overview BPI
Lower capital intensity business delivering good RONOA
Financial development of the Group (£m, Dec y/e) Key historical financials1
505 11.0% £m , Dec y/e 2012A 2013A 2014A 2015A
495
500 476 464 Sales 476 505 495 464
10.0% Growth (%) 6.1% (1.9)% (6.4)%
EBITDA 34 38 41 43
400 9.0% Margin (%) 7.1% 7.4% 8.3% 9.2%
Growth (%) 11.3% 10.1% 3.4%
9.2%
EBIT 21 24 27 29
300 8.0% Margin (%) 4.5% 4.8% 5.5% 6.2%
8.3%
Growth (%) 13.6% 12.8% 4.4%
7.4% 7.0% RONOA 16.2% 17.0% 18.8% 19.6%
200 7.1% 109
6.0%
6.2%
100 Pro Forma financials (including synergies)
5.5% 5.0%
£m, Dec y/e EBITDA2 EBIT3 RONOA4
4.8% 2015 PF 57 46 33%
0 4.5% 4.0% Margin (%) 12.2% 9.8%
2012A 2013A 2014A 2015A
Sales EBITDA margin (%) EBIT margin (%) Current trading
● In line with BPI’s AGM trading update of 10 May 2016 the
Notes Directors believe that:
1 Reported f igures normalised for impact of BPI China subsidiary disposal only − BPI has had a positive start to the year with
2 BPI reported EBITDA 2015 before restructuring of £43.6m adjusted for: plus £2.0m exceptional performance ahead of BPI management expectations
poly mer impact plus £1.9m of reduced energy costs and provision movement less £0.9m contribution
f rom discontinued Chinese BPI subsidiary plus £10m synergies − Results have benefited from lower energy costs and
3 Adjustments per PF EBITDA plus £3.0m benefit from alignment of depreciation policies favourable currency translation effects
4 Adjustments per PF EBIT plus £10m working capital synergyRPC Group Plc
Proposed Acquisition of BPI
Group strategy and acquisition rationale
Excellent fit with Vision 2020 strategy – selective consolidation in Europe
Strong m arket positions, ● Entry into high added value segments in a fragmented polymer consuming market
differentiated by engineering ● Leading positions in its markets, supported by industry recognised, branded products
capabilities ● BPI’s strong focus on innovation fits well with RPC’s focus on product development
Entry to an adjacent polym er ● Complementary parallel addition to RPC’s existing strategy in rigid technologies
consum ing m arket ● Majority of larger packaging groups operate in both rigid and flexible plastic market segments
110
Access to a European ● Opportunity to extend RPC’s European consolidation strategy into polythene films
polythene film s platform
enabling a parallel buy-and- ● Identified pipeline of potential strategic acquisition targets that would enhance BPI’s existing product
build strategy segments and further consolidate polymer procurement
Enhancing the Group’s overall ● RPC currently buys c. 600kt of polymer, mainly in Western Europe
longer term polym er buying
position
● BPI buys c. 200kt of polymer, mainly in Western EuropeRPC Group Plc
Proposed Acquisition of BPI
Global plastic packaging players
Most of the larger players operate in both rigid and flexible plastics
Global plastic packaging peers – consensus revenues for current year (£bn)
£6.5bn
£4.8bn £4.6bn
£3.5bn
£2.8bn £2.6bn £2.4bn
£1.8bn £1.7bn £1.5bn
£0.5bn
111
Amcor Sealed Air Berry Sonoco Bemis RPC + BPI Alpla¹ Coveris¹ Plastipak¹ Constantia¹ BPI
Flexible
Rigid
Other
(Diversey) (AVINTIV) (Paper and
Industrial)
RPC
BPI
Source: Company reports, Factset
Note
1 Priv ate companies (sales per latest available numbers)RPC Group Plc
Proposed Acquisition of BPI
Group strategy and acquisition rationale
Clear synergistic opportunities
Targeted ongoing annual pre-tax cost synergies of c. £10m per annum fully realisable within the first two full
years with additional c. £3m benefit from lower depreciation plus an additional one -off cash synergy of c.
£10m. Expected one-off cash costs to deliver synergies estimated at c. £5m
Synergy opportunities – c. £10m
● Polymer and other procurement synergies
● Elimination of duplicate corporate overheads, head office functions and PLC cost base
112
● Further optimising the cost base through best practice exchange
Cash synergies – c. £10m
● Working capital management enhanced resulting in a cash synergy of c. £10m
Other – c. £3m
● c. £3m of lower depreciation based on RPC’s accounting policies
Targeted pre-tax cost synergies of c. £10m are considered achievableRPC Group Plc
Proposed Acquisition of BPI
Group strategy and acquisition rationale
Integration plan
● Given its distinct technologies and product segments, BPI will become a sixth stand-alone division within RPC
● RPC has an excellent track record of integration and reorganisation
– Previous track record of realising synergies on Promens, PET Power, Innocan, M&H Plastics, Manuplastics
Helioplast and Superfos
– GCS and Promens acquisitions are projected to support in total €80m of steady state cost synergies
113
● Post acquisition efforts will be focused on
– Extraction of polymer and other procurement synergies
– Elimination of duplicate corporate overheads, head office functions and PLC cost base
– A detailed review of the operations and locations of BPI to be conducted after completionRPC Group Plc
Proposed Acquisition of BPI
Group strategy and acquisition rationale
Acquisition criteria & Vision 2020 financial metrics
RPC acquisition criteria
● Strategic fit Clear acquisition rationale and strategy
● Strong incumbent management Strong incumbent management team in place
● Financial track record Resilient profitability from diversified geographic and product markets
● Financial criteria:
Pro forma ROCE on acquisition ahead of WACC1
− ROCE > WACC of RPC
Polymer purchasing and removal of overheads 114
− Quantifiable synergies
EPS accretive within first full year post acquisition, materially
− Earnings accretion accretive within second full year post acquisition
− Impact on Group KPIs See below
Vision 2020 financial metrics
● Return on sales of at least 8% Return on sales of c. 10%2 (post synergy realisation)
● RONOA of at least 20% RONOA of c. 33%3 (post synergy realisation)
Notes
1 Pro f orma £10m of pre-tax cost synergies and £3m depreciation alignment
2 Pro f orma f or £2.0m exceptional polymer impact plus £1.9m of reduced energy costs and provision movements less £0.9m contribution from discontinued Chinese BPI subsidiary plus £10m synergies plus
£3.0m benef it from alignment of depreciation policies
3 Adjustments per PF EBIT plus £10m working capital synergyRPC Group Plc
Proposed Acquisition of BPI
Transaction structure and timetable
Acquisition financing structure
Consideration
● Offer price of 940p1 per share (30% premium2) representing an implied offer value of £261m (fully diluted)
● Enterprise value of £283m, excluding pensions and minorities, 6.1x 3 multiple on adjusted Dec 2015 EBITDA of £46.6m 4
– RPC to assume net pension deficit of BPI of £47.6m (post-tax)
● Consideration payable 50% in RPC shares and 50% in cash
– BPI shareholders to receive 470p in cash and 0.601411,5 of a New RPC Share for each BPI share held
– BPI shareholders will own c. 5% of the enlarged group post transaction
115
Financing of cash element
● Cash element financed via a mix of debt and equity
– Additional BPI net debt of £22.4m 6 post China subsidiary disposal
● Pro forma enlarged group opening leverage of 2.1x net debt / LTM EBITDA as at 31 Mar 16
● Fully underwritten placing of c. £90m (c. 4% of issued share capital)
Notes
1. Based on RPC 1 month share price average up to 8 June 2016 of 781.5p.
2. Based on BPI ref erence share price of 725.0p
3. Including pensions and minorities: multiple of 7.1x based on adjusted EBITDA and 7.6x multiple based on reported EBITDA of £43.6m.
4. BPI reported EBITDA 2015 before restructuring of £43.6m adjusted for: plus £2.0m exceptional polymer impact plus £1.9m of reduced energy costs and provision movement less £0.9m contribution
f rom discontinued Chinese BPI subsidiary
5. Ratio could be adjusted for final dividend to 0.61102 if completion is past ex div date
6. BPI net debt based on reported Dec 2015 net debt of £32.1m adjusted for proceeds from discontinued Chinese BPI subsidiary of £9.7mRPC Group Plc
Proposed Acquisition of BPI
Transaction structure and timetable
Transaction timetable
Announcement of the Acquisition and Placing1 9 June 2016
Expected admission and commencement of dealings in Placing
13 June 2016
shares on the London Stock Exchange
Expected scheme document posted End of June 2016
116
Expected BPI shareholder meeting Mid July 2016
Expected date of Completion of Acquisition Mid August 20162
Financial Adviser Rothschild
Joint Bookrunners and Underwriters Deutsche Bank; Panmure Gordon
Note
1. The Placing is not conditional on the completion of the acquisition. RPC intends that the net proceeds of the Placing will be retained by RPC for general corporate purposes and future possible
acquisitions that fulfil RPC’s strategic objectives
2. Transaction expected to complete following receipt of customary EU competition approvalYou can also read
