(Reuters) - RPC Group Plc (L:RPC) said it would buy French bottle-top maker Global Closure Systems (GCS Group) for an enterprise value of 650 million euros (468.7 million pounds) to strengthen its position in Europe's plastic packaging market.
The deal marks an exit for private-equity firm PAI Partners whose funds bought GCS Group in 2005 for 583 million euros from Crown Holdings (N:CCK).
Headquartered on the outskirts of Paris, GCS sells its products in more than 100 countries. Among its main product lines are plastic lids for mineral water and milk bottles, as well as child resistant closures for pharmaceutical products.
Reuters had reported in October than a combination of trade buyers and private equity funds had submitted indicative bids for GCS Group.
RPC said it would pay the sellers, GCS Group and the holding company Financière Daunou, 186 million euros in cash on completion of the deal.
RPC, which supplies packaging for Beiersdorf's (DE:BEIG) Nivea skin creams and Nescafe (VX:NESN) coffee capsules, plans to raise about 232.6 million pounds ($353.4 million) through a fully underwritten 1-for-5 rights issue at 460 pence per share to part fund the deal.
The balance would be funded by increasing its revolving credit facility to 770 million pounds from 490 million pounds, the company said.
RPC has been on the prowl looking for deals in eastern and western Europe over the past few years, as the European plastic packaging maker heads a consolidation in the industry that competes with glass, plastic and aluminium-based packaging.
Last year, RPC bought Iceland-based plastic products maker Promens Group AS for 386 million euros.
The GCS deal, which is expected to close by the end of March 2016, will add to RPC's earning per share in the first full year after completion, the London-listed company said.
GCS Group, which had an annual turnover of 591 million euros with about 3,500 employees in 2014, finds its roots dating back to 1884 and supplies plastic closure products for the FMCG market, according to the company's website.
Credit Suisse advised PAI on the deal, while RBC Europe Ltd advised RPC.
Shares in RPC were up 2.1 percent at 780 pence at 0929 GMT on the London Stock Exchange on Monday.