Berry Global Group, a plastic packaging products firm, has completed its acquisition of RPC Group for a purchase price of approximately $6.5bn (£5.1bn), subject to closing adjustments.

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Image: Berry completes acquisition of RPC Group for approximately £5.1bn. Photo: Courtesy of Adam Radosavljevic from Pixabay.

Berry said that the purchase price includes approximately $4.3bn (£3.4bn) of cash paid for the equity interest in RPC and $2.2bn (£1.7bn) of net debt and estimated transaction related costs.

Based on the latest financial statements published by Berry and RPC, the pro forma combined business will employ more than 48,000 people across six continents with sales of approximately $13bn (£10bn).

Berry chairman and CEO Tom Salmon said: “We are very excited to move forward together as a global plastic and recycled packaging industry leader, serving thousands of customers with our high-quality, innovative, and protective solutions along with the industry’s most diversified and expansive manufacturing footprint.

“The acquisition of RPC will give us the opportunity to leverage our combined know-how in innovative material science, product development, and manufacturing technologies to create significant value for our shareholders. Through this shared approach, we anticipate approximately $150 million in annual synergies.”

Berry intends to finance the acquisition from a portion of its May 2019 sale proceeds of $1.25bn (£1bn) of 4.875% first priority senior secured notes due 2026 and $500m (£395m) of 5.625% second priority senior secured notes due 2026.

In addition, a $4.25bn (£3.36bn) incremental term loan and a €1.075bn (£960m) incremental term loan, which also served to refinance an existing term loan of the company are also planned to be used for financing.

Salmon added: “We remain highly impressed by the tremendous depth of talent and resources embedded within RPC, and are looking forward to the opportunity to strengthen our combined platform with the wealth of experience and expertise this team has to offer.

“We believe this acquisition will further enhance the long-term outlook for our business and will provide a unique value creation opportunity for our shareholders.”

On the transaction, Goldman Sachs International, Wells Fargo Securities, and J.P. Morgan Securities served as financial advisors and Freshfields, Bruckhaus Deringer and Bryan Cave Leighton Paisner served as legal advisors for Berry.