Reno de Medici has decided to focus on its core business, the recycled board market, and to exit the virgin fibre board market. The company plans to sell its La Rochette plant in France, which makes folding boxboard based on virgin fibres (FBB).
Italian board manufacturer Reno de Medici (RDM) announced that its subsidiary RDM Blendecques had received an irrevocable purchase offer from Bonaparte Holding for the sale of the La Rochette plan. The company signed the relevant put option agreement to sell the site. The signing of a binding contract is expected within the first half of 2021.
The enterprise value was set at €28.8m plus an earnout equal to 25 per cent of Ebitda in excess of €7.2m in each of the financial years 2021, 2022 and 2023. To partially finance the transaction, a €6.5m vendor loan would be provided to Bonaparte Holding, the group said.
The La Rochette plant is RDM's only plant for virgin fibre board. It operates two machines with a combined capacity of 165,000 tpy of GC 1 and GC 2. The group acquired the site from Cascades in 2016. RDM is mainly active in the recycled board market. In 2020, the corresponding business - the white lined chipboard (WLC) business - accounted for 83 per cent of group sales, while FBB accounted of 17 per cent.
RDM had already mentioned in early 2020 that La Rochette was struggling to cope with overcapacity in the market for GC board and compete with large suppliers from Northern Europe. Reaching an operating profitability in line with the average rate of the other assets in the group's portfolio would require further significant capital expenditures, the company noted, which is why it decided to take the opportunity and exit this market segment.
Paprinsa takeover almost completed
The company will now focus on its core segment. "We are working to strengthen our leadership in the WLC market", it said, referring to its most recent acquisitions in Spain in particular. At the end of 2018, it re-entered the Spanish market by acquiring Barcelona Cartonboard, which has a board capacity of 200,000 tpy. It has the possibility to produce virgin fibre board as well.
In autumn 2020, RDM furthermore signed an agreement to acquire Spanish Papelera del Principado (Paprinsa) as well as the three smaller companies Fergerdell, Cogeneraciò del Pla and Ondupacart, which are all based in the same site. The site can make up to 140,000 tpy of WLC, and RDM is considering expanding capacities. The company expects the takeover to close in the coming weeks.
RDM currently operates seven board plants and two sheeting plants in Italy, France, Germany and Spain with a combined capacity of 1.2 million t.
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