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Acquisition and Notice of General Meeting

 3rd Nov 2014

Plastics Capital, the niche plastics products group, announces it has conditionally agreed to acquire Flexipol Packaging Limited ("Flexipol") for a maximum consideration of £10.64 million.

Acquisition Highlights

  • Maximum cash consideration of £10.64 million
  • Expected to be earnings enhancing in the first full financial year
  • Oversubscribed placing to raise £5.0 million to partly satisfy the initial consideration
  • Complementary products and customers with the Company’s existing packaging business
  • Expected near-term cost synergies from increased buying power for the enlarged packaging business
  • Long-term cross-selling opportunities

Transaction Highlights

The maximum consideration payable pursuant to the acquisition of Flexipol is £10.64 million based on:

  • £9.82 million payable in cash on completion; and
  • £0.82 million of earn-out payments which may be payable in cash based on certain EBITDA targets.

The consideration will be satisfied in cash through the proceeds of the Placing from the issue of 5,102,041 new Ordinary Shares to new and existing investors at a price of 98p per share and raising £5.0 million (before expenses), a £5.4 million extension of the existing debt facility with Barclays Bank plc and £0.5 million from existing cash resources.

Faisal Rahmatallah, Chairman and CEO of Plastics Capital, commented:

“We are very pleased to announce the acquisition of Flexipol Packaging Limited. Flexipol is very clearly a business that meets our acquisition criteria ­ specialty products, high recurring revenues with loyal customers, limited competition and healthy financial performance. This acquisition meets our criteria.  It is complementary to Palagan and this should enable us to extract significant synergies in due course through cross selling, operational efficiencies and raw material cost savings.

We are also very pleased to announce an oversubscribed £5 million placing with both new and existing institutional shareholders, at a 4.4% discount, in order to part finance the Flexipol acquisition.”

 

Download full announcement (pdf)

Download Circular and Notice of General Meeting (pdf)

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