The Italian papermaker Reno De Medici has signed an agreement to sell its French site, the La Rochette paper mill presented by the German company Mutares, for 28.8 million euros.
Located in La Valgelon-La Rochette in Savoie, La Rochette, which employs nearly 300 people, specializes in the segment of folding box board (FBB) mainly for the pharmaceutical and food industries. With two paper machines, the plant has a production capacity of 165?000 tons of FBB.
The purchase will be made by Bonaparte Holding, a French company controlled by the Mutares investment holding company, listed on the European stock exchange. Mutares owns 19 companies and has a turnover of ?2 billion. From 2015 to 2018, Mutares owned the German paper group Zanders.
"La Rochette places a strong emphasis on the natural appearance of its packaging, as market demand for more sustainable and environmentally friendly packaging increases, stresses Mutares. The company has also obtained several environmental certificates such as the Forest Stewardship Council (FSC), an environmental label that rewards companies with exceptional traceability of their production and helps to promote responsible management of the world's forests"
RDM leaves the FBB segment
By selling its French site, RDM Group leaves the FBB market. The Italian company wants to focus on the market for coated packaging board based on recycled fibres (White Lined Chipboard or WLC), on which the group is the leading Italian producer and the second largest in Europe.
Michele Bianchi, CEO of the RDM Group, states in a press release : "Since its acquisition by RDM in 2016, the profitability of the La Rochette plant has increased, thanks to the operational efficiencies achieved in those years and the management efforts of our team. However, achieving operating profitability in line with the average rate of other assets in our portfolio would require significant additional investment."
For the year ended 31 December 2019, La Rochette reported sales of 111.9 million euros, earnings before interest, taxes, depreciation and amortization (EBITDA) of 5.8 million euros and a net loss of 6.7 million euros. Net financial debt amounted to 12.9 million euros at 31 December 2019.
A three-year earn-out agreement
The agreement provides for an enterprise value - set at EUR 28,8 million - plus an additional 25% of EBITDA in excess of EUR 7,2 million for each of the years 2021, 2022 and 2023. In the event that the threshold of EUR 7,2 million is not reached in one of these three years, the earn-out clause would be extended to the financial year 2024.
The agreement is expected to be finalized in the first half of 2021.
