* To buy ACE Corporation Holdings for as much as $430
* Deal gives RPC access to five plants in China
* To pay initial sum of $301 mln, up to $129 mln over four
* RPC stock rises 4 percent, among top FTSE-250 percentage
(Adds CEO comment, details, updates share movement)
By Tasim Zahid
May 1 Britain's RPC Group Plc, one of
the world's biggest plastic packaging makers, will buy Hong
Kong-based ACE Corporation Holdings Ltd for as much as $430
million to meet growing demand from customers in Asia.
RPC's stock rose more than 4 percent on Thursday to rank
among the top percentage gainers on the FTSE-250 Midcap Index
RPC's first foray into Asia will give the company access to
five manufacturing plants in China, including a site in the city
of Hefei adjacent to Unilever Plc's biggest Chinese
ACE Corporation makes products ranging from food and
cosmetics packaging to remote-control keys for cars, waterproof
iPad cases and syringes.
"Our customers have been pressing us for some time now to be
able to deliver to them (in Asia) what we deliver to them in
Europe," Chief Executive Pim Vervaat said in an interview.
"Until now, we did not have a manufacturing platform in
China to follow it up."
Asia accounts for about 27 percent of the global rigid
plastics packaging market, which was worth about $135 billion in
2013, according to a presentation on RPC's website. (link.reuters.com/daf98v)
Rushden, Northamptonshire-based RPC, which makes packaging
for Nivea beauty products and Nescafe Dolce Gusto coffee-machine
capsules, said it would pay an initial sum of $301 million for
It will pay up to an additional $129 million should ACE
record a compound annual growth rate of at least 15.6 percent in
its earnings before interest, taxation, depreciation and
amortization (EBITDA) over the four years ending Dec. 31, 2017.
RPC said it planned to fund the deal by issuing about 8.5
million new shares to ACE shareholders, as well as a placement
to raise about 75 million pounds ($126.64 million), a new
revolving credit facility and existing cash.
The acquisition is expected to boost earnings per share in
the first full financial year after closing and result in annual
pretax cost savings of at least 1 million pounds, RPC said.
ACE reported EBITDA of 24 million pounds on revenue of about
104 million pounds in 2013.
RPC's shares were up 2.5 percent at 614.99 pence on the
London Stock Exchange at 1200 GMT.
($1 = 0.5922 British Pounds)
(Additional reporting by Roshni Menon in Bangalore; Editing by
Robin Paxton and Supriya Kurane)