Berry Global Group has bought global plastic packaging supplier RPC Group, securing the equity interest in the company and its debts for around $6.5bn.
The price of the equity interest was said to be around $4.3bn, which was paid in cash, with the company’s net debt and transaction-related costs in the deal amounting to the remaining $2.2bn of the fee.
According to the US-based plastic packaging products maker, the merger will create a major global supplier of valued-added protective and plastic packaging solutions.
The merged entity will have more than 290 locations across Europe, Asia, Africa, Australia and North and South America, employing more than 48,000 people with sales of approximately $13bn.
Berry chairman and chief executive officer Tom Salmon said: “We are very excited to move forward together as a global plastic and recycled packaging industry leader, serving thousands of customers with our high-quality, innovative and protective solutions, along with the industry’s most diversified and expansive manufacturing footprint.
“The acquisition of RPC will give us the opportunity to leverage our combined know-how in innovative material science, product development and manufacturing technologies to create significant value for our shareholders.
“Through this shared approach, we anticipate approximately $150m in annual synergies.”
To finance the transaction, Berry used a portion of the proceeds from selling 4.875% of its first priority senior secured notes due by 2026 raising $1.25bn to finance the deal. Another $500m of funds were generated through the company’s sale of 5.625% of second priority senior secured notes that were due for the same year.
In addition, two incremental term loans to the value of $4.25bn and $1.075bn contributed to the payment of the deal, which also allowed a separate Berry loan to be refinanced.
RPC offers plastic and recycled products for packaging and selected non-packaging markets. It currently operates 153 manufacturing locations across 33 countries, employing approximately 25,000 people.
Salmon added: “We remain highly impressed by the tremendous depth of talent and resources embedded within RPC, and are looking forward to the opportunity to strengthen our combined platform with the wealth of experience and expertise this team has to offer.
“We believe this acquisition will further enhance the long-term outlook for our business and will provide a unique value creation opportunity for our shareholders.”
Goldman Sachs International, Wells Fargo Securities and JP Morgan Securities served as financial advisors in the deal, while Freshfields, Bruckhaus Deringer and Bryan Cave Leighton Paisner acted as legal advisers for Berry Group.