Rigid plastic packaging group RPC (RPC) looks set for further growth after announcing its largest deal to date, the proposed £470 million acquisition of French bottle-top maker Global Closure Systems (GCS).

It is the fourth deal worth more than £100 million that RPC has made since December 2013, following its acquisitions of Maynard & Harris, Ace and Promens.

These deals have driven the shares up 47% over the past two years, and today’s news adds a further 2% to 779.5p.

RPC - Comparison Line Chart (Rebased to first)

The acquisition of GCS is being funded by a mixture of debt and a rights issue priced at 460p per share, which will raise approximately £232.6 million.

The deal expands RPC’s reach to Mexico, Thailand and the Philippines, increasing the proportion of sales it derives from outside Europe. GCS also adds expertise within caps, closures, lids and dispensing systems, where RPC currently has limited exposure.

RPC is targeting €15 million of annual cost synergies from the deal, but it has a history of under-promising and over-delivering. When it acquired Promens in February it was targeting £21.6 million of synergies, but it recently increased this to £36 million.

Issue Date: 14 Dec 2015