RDM Group Receives an Irrevocable Purchase Offer for the Sale of R.D.M. La Rochette

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The Board of Directors of RDM Group favorably assessed an irrevocable offer received by its subsidiary RDM Blendecques S.A.S. for the purchase of its 100% interest in R.D.M. La Rochette S.A.S. The offer was submitted by Bonaparte Holding SAS.

RDM Blendecques S.A.S. thus today signed a put option agreement to sell its fully owned French company R.D.M. La Rochette.

The offeror, Bonaparte Holding SAS, is a company under French law controlled by Mutares SE & Co. KgaA, an investment holding listed on the Frankfurt stock exchange and specialized in the acquisition of medium-sized companies.

Michele Bianchi, CEO of RDM Group, commented: “By accepting the irrevocable offer for the purchase of La Rochette, RDM Group has taken the opportunity to exit from the FBB business, the segment of cartonboard for folding boxboard based on virgin fibers. Compared to when it was acquired by RDM in 2016, the profitability of La Rochette plant has increased, also thanks to the operating efficiencies achieved in these years and our team’s management effort. However, reaching an operating profitability in line with the average rate of the other assets in our portfolio would require further significant capital expenditures.”

“By exiting from this segment, RDM Group will effectively unlock resources and managerial energies to increase its focus on the current growth and consolidation path,” CEO Michele Bianchi continued, “Through the integration of the most recent acquisitions Barcelona Cartonboard and Paprinsa, the closing of which is expected to take place in the coming weeks, we are working to strengthen our leadership in the WLC market.”

La Rochette operates in the segment of cartonboard for folding boxboard based on virgin fibers(FBB). With its manufacturing plant in La Rochette, France, 140 km from Lyons, the company has a theoretical capacity of 165,000 tons of virgin-fiber FBB. The plant operates withtwo papermachines and can produce a wide range of products of different grammages.

For the year ended December 31, 2019, based on IFRS, La Rochettereported Sales of€111.9million, an EBITDA of€5.8million andaNet Loss of€6.7million. Net Financial Debtwas€12.9million at December 31, 2019.

In the irrevocable offer,La Rochette’s Enterprise Value has been set at €28.8 million, plus an earnout equal to 25% of EBITDA in excess of €7.2 million ineach of the financial years 2021, 2022 and 2023. In the event that even in only one of the three above-mentioned financial years the €7.2 threshold is not exceeded, the earnout clause would be extended to financial year 2024.

Theoffersets up that at theclosingof the deal an initial amount of €5millionwill be paid, calculated on theEnterprise Value of €28.8 million after deducting: (i) NFP of €13.8 million reported at the end of June 2020; (ii)further adjustments totaling €3.5 million;and(iii) €6.5 million for a vendor loan grantedby RDM Blendecques S.A.S. toBonaparte Holding SAS, with a three-year maturity from the completion of the transaction and repayment at constant yearly instalments, including interest of 2% per year.

The irrevocable offer also provides that the pricewill be subject to adjustments based on the level of NFPand theworking capital.

Under the irrevocable offer, the transaction execution is subject to the fulfillment of some suspensive conditions precedent, including: (i) the absence of any government authorities’ measures or procedures aimed at preventing or limiting the execution of the transaction; (ii) the obtainment of waiversof counterparties in financial contracts; and (iii) the obtainment of legal authorizations by the competent Antitrust Authorities.

In the possible transaction, UniCredit and Jones Day are actingrespectively as financial and legal advisors for Reno De Medici S.p.A..

This document is an English translation from Italian. The Italian original shall prevail in case of difference in interpretation and/or factual errors.

Source: RDM Group