Leading fund manager and private equity provider, Octopus Asset Management, today announced that it has led a £3.1m equity investment, along with Investec Growth & Acquisition Finance, to support Plastics Capital in an £11 million acquisition of two niche plastic product businesses.
Investec Growth & Acquisition Finance initially backed Plastics Capital with its platform acquisition in November 2004 with £3.2m of composite senior, mezzanine and minority equity finance.
The combined group is composed of three separate niche plastic manufacturing businesses with factories located in Knaresborough, Leicester, Dartford and Poole with an aggregate turnover in excess of £15m.
The group strategy is to continue acquiring well-positioned plastics manufacturing businesses, with a view to floating on AIM within the medium-term.
Octopus has acquired a significant minority stake in the equity of Plastics Capital and Octopus Director, Christopher Allner, has joined the board of Plastics Capital. The investment will come from Octopus funds, 'Eclipse VCT' and 'Eclipse VCT 2'. Investec Growth & Acquisition Finance has provided additional senior, mezzanine and equity finance in this round and has maintained a minority equity stake. Asset finance was provided by GE Commercial Finance's, Business Finance division.
Christopher Allner of Octopus Asset Management said: '"We have been in contact with the Company since summer 2004 when they were preparing to make their first acquisition. Over the last 18 months we have seen the performance of the acquired business improve significantly under the guidance of new management and we are delighted to support the team in making two further acquisitions.
Faisal Rahmatallah, Chairman of Plastics Capital, comments: "The transaction was not straight forward with simultaneous due diligence and legal documentation being carried out on two separate, and relatively complex, transactions. However, we believe the two new additions to the Plastics Capital Group combine to make an attractive and highly cash generative group. "
Ed Cottrell of Investec Growth & Acquisition Finance, comments: "After initially backing the Plastics Capital team in their platform acquisition, we have been impressed with their ability to deliver value and are looking forward to participating in the next phase of their development."
Adam Wardle of GE Commercial Finance, comments: "The Plastics Capital management team was experienced and dedicated to building the group. The acquisitions looked like a great value proposition, Investec was involved, Octopus Asset Management was involved, the numbers added up! It sounded like a good deal to me!"
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