Home :
News : 2014 : Acquisition of Beijing Higher Shengli Printing Science and Technology Co., Ltd

Acquisition of Beijing Higher Shengli Printing Science and Technology Co., Ltd

 31st Oct 2013

Plastics Capital, the niche plastics products group, announces it has conditionally agreed to acquire Beijing Higher Shengli Printing Science and Technology Co., Ltd (“Shengli”), a leading Chinese manufacturer of creasing matrix.

Acquisition Rationale

The acquisition of Shengli is in-line with Plastic Capital’s strategy to build shareholder value through acquisition of related niche plastics products businesses.

Established in 1998 Shengli is a profitable, privately owned manufacturer of plastic creasing matrix located in the Tongzhou District of Beijing. Shengli employs approximately 50 personnel and is estimated to have 30 per cent. share of the domestic Chinese market for creasing matrix. China is one of the world’s largest markets for plastic creasing matrix and the Chinese market is estimated by the Company to be worth approximately £5 million in annual sales and growing at a rate of between 15 and 20% per annum. Accordingly, the Directors believe the Chinese market for creasing matrix represents a significant opportunity for the Group.

Shengli will fit well with Plastics Capital’s existing creasing matrix business, C&T Matrix Limited (“C&T”) and is complementary in terms of earnings, geographical footprint and technical capability.

The acquisition is to be satisfied in cash through the issue of 2,700,000 new Ordinary Shares to new and existing investors in the company to raise £2.7 million at a placing price of 100p representing a discount of 8.7% to the closing mid-price on 30 October 2013.

Transaction highlights

(i) The acquisition will significantly increase the Company’s presence in China

(ii) The acquisition expected to be earnings enhancing acquisition in the first full financial year

(iii) Oversubscribed placing to raise £2.7 million at 100 pence per share.

Simon Shenton, Managing Director of C&T Matrix says: “Shengli has built up a strong distribution network and brand name in China over the last 15 years and together with C&T will have a dominant position across China. C&T continues to grow its client base organically; with over 130 distributors across 70 countries, we are the leading producer of creasing matrix worldwide and we continue to have strong ambitions for future growth, as evidenced by acquisitions such as Shengli which bring us improved market penetration in growth territories.”

Faisal Rahmatallah, Executive Chairman of Plastics Capital, comments: “China is one of the world’s fastest growing markets for creasing matrix thanks to the increasing sophistication of local packaging producers and an increase in demand within the country for consumer goods. Shengli is the market leader in China and has developed a strong brand and excellent distribution network across the entire region. The years of know-how and technical expertise that C&T has developed over the past 60 years together with the established brand and customer reach of Shengli in China will combine to bring customers a world-class product offering for die cutting and creasing products.”

Download full announcement (pdf)

Download Circular and Notice of General Meeting (pdf)

Download Proxy (pdf)

Powered by Intergage