RDM Group acquires Papelera del Principado (Paprinsa)

RDM Group has signed four preliminary agreements for the acquisition of 100% of the share capital of four companies incorporated in Spain. The deal covers the acquisition of one of the main European players of the coated chipboard industry, Papelera del Principado S.A. (“Paprinsa”), and three smaller companies operating in contiguous businesses based in the same site: Fergerdell S.L., Cogeneraciò del Pla S.A. and Ondupacart S.A..

Michele Bianchi, CEO of RDM Group, stated: “The acquisition we are announcing today confirms that RDM Group continues to invest with the target of profitable growth, by selecting companies that fit a consistent business approach. We keep strengthening our competitive positioning as the leading company in Southern Europe in the segment of recycled cartonboard, as part of a clear long-term strategy and leveraging on a solid financial position. This allows us to be ready to grasp the utmost benefits from a demand that has proven to be solid even in the most critical times of the Covid-19 pandemic, due to the essentiality of the material we produce.”

Founded in 1977, Paprinsa operates in the recycled White Lined Chipboard (WLC) business. The company has both its headquarters and mill in Mollerussa, just 130 km from Barcelona and less than one hour from the plant of RDM Barcelona Cartonboard. It manufactures 120,000 tons of recycled chipboard, with a potential capacity of 140,000 tons. Over the past six years, Paprinsa has made significant investments for more than €30 million in its plant. Production includes a wide range of grades and grammages (from 180 to 550g).

Today, Paprinsa is the no. 2 chipboard producer in Spain, and the eighth WLC producer in Europe. The paper mill has a trim width of 4.8 meters, which will make it the widest plant in RDM Group, as it is one of the largest paper mills of this sector in Europe. By further exploiting this size, RDM Group can count on a potential increase in the factory’s production capacity from the current 140,000 tons a year to over 200,000 tons a year, in line with the other top plants today part of the Group.

Ondupacart S.A. is a small corrugator manufacturer. Fergerdell S.L. is the real estate company that owns the 30,000 sqm area on which the two manufacturing companies stand. Cogeneraciò del Pla S.A. is the former cogeneration plant recently sold to Paprinsa. The company currently provides both plants with maintenance services. The four companies have an overall workforce of 140 employees.

Over the past financial year, ended December 31, 2019, based on Spanish GAAP, the four companies to be acquired reported1 revenues of €65.9 million, EBITDA of €3.5 million and a net loss of €456 thousand. At December 31, 2019, net financial debt was €22.9 million. The provisional price for the acquisition of the four companies is based on a total Enterprise Value of €31.2 million, calculated on proforma EBITDA for 2020 of €5.2 million, and on an estimated NFP of about €20.9 million.

Mr. Bianchi also commented: “This is not only an attractive transaction in absolute terms. It is also an ideal acquisition to further strengthen our Group performance, when considering the value we can generate by including Paprinsa in the multi-mill approach of our asset portfolio, and the visible synergies that we can achieve by leveraging on the proximity with the Barcelona Cartonboard mill.”