UK plastic packaging maker RPC to buy Iceland's Promens

By Roshni Menon and Esha Vaish

(Reuters) - British plastic packaging supplier RPC Group Plc (RPC.L) said it would buy Iceland-based plastic products maker Promens Group AS for 386 million euros (306.73 million pounds) to strengthen its position in Europe and help satisfy its increasing need for polymer.

RPC shares rose as much as 4.8 percent, making them one of the top percentage gainers on the FTSE-250 Midcap Index (.FTMC).

The company said it would raise about 200 million pounds ($316 million) through a fully underwritten 1-for-3 rights issue at 320 pence each to partly fund the deal.

RPC, whose business includes making packaging for Nivea (BEIG.DE) creams and Nescafe (NESN.VX) coffee capsules, said the balance would be funded by increasing its revolving credit facility to 490 million pounds from 350 million.

Privately owned Promens, which has grown through acquisitions, has 40 plants, including 35 in eastern Europe.

RPC has 50, mostly in Europe but also in the United Kingdom, the United States and China.

RPC said the Icelandic company's operations in China and India would help it reinforce its presence beyond Europe.

"The growth is very much outside of Europe ... and as disposable incomes rise in India, China and also Latin America, our customers have needs," RPC Chief Executive Pim Vervaat told Reuters.

RPC said revenue from continuing operations rose 12 percent to 588.9 million pounds in the six months ended Sept. 30, boosted largely by acquisitions. Analysts on average had expected revenue of 571 million pounds.

Like-for-like revenue rose 4 percent.

The acquisition of Promens is RPC's fourth significant deal in two years, including one that gave it five plants in China.

"We do have the space to do a number of bolt-on acquisitions in the next six to nine months," Vervaat said.

The latest deal, which is expected to close by the end of March, values Promens at 6.8 times 2013 EBITDA before non-recurring items of 57 million euros.

(Reporting by Esha Vaish and Roshni Menon in Bangalore; Editing by Ted Kerr)