PaperAge Magazine

RDM Group to Acquire Spanish Chipboard Producer Paprinsa

Paprinsa in Spain Currently, Paprinsa is the No. 2 chipboard producer in Spain, and the eighth WLC producer in Europe, manufacturing 120,000 tons per year of recycled chipboard, with a potential capacity of 140,000 tons.

Oct. 1, 2020 - RDM Group today announced that its subsidiary RDM Barcelona Cartonboard S.A.U. has signed four preliminary agreements for the acquisition of 100% of the share capital of four companies incorporated in Spain. The deal covers the acquisition of one of the main European players of the coated chipboard industry, Papelera del Principado S.A. ("Paprinsa"), and three smaller companies operating in contiguous businesses based in the same site:

  • Ondupacart S.A. – a small corrugator manufacturer.
  • Fergerdell S.L. – the real estate company that owns the 30,000 sqm area on which the two manufacturing companies stand.
  • Cogeneraci√≤ del Pla S.A. – the former cogeneration plant recently sold to Paprinsa. The company currently provides both plants with maintenance services.

Combined, the four companies have an overall workforce of 140 employees.

The purchase price of the deal was not disclosed.

Michele Bianchi, CEO of RDM Group, said, "The acquisition we are announcing today confirms that RDM Group continues to invest with the target of profitable growth, by selecting companies that fit a consistent business approach. We keep strengthening our competitive positioning as the leading company in Southern Europe in the segment of recycled cartonboard, as part of a clear long-term strategy and leveraging on a solid financial position. This allows us to be ready to grasp the utmost benefits from a demand that has proven to be solid even in the most critical times of the Covid-19 pandemic, due to the essentiality of the material we produce.

"This is not only an attractive transaction in absolute terms. It is also an ideal acquisition to further strengthen our Group performance, when considering the value we can generate by including Paprinsa in the multi-mill approach of our asset portfolio, and the visible synergies that we can achieve by leveraging on the proximity with the Barcelona Cartonboard mill," Bianchi added.

Based on an estimated proforma EBITDA of EUR 5.2 million for 2020, the RDM Group expects to reach an EBITDA increase of between 3 and 5 million euro over the integration process of the coming three years. Such benefits will be achieved mainly thanks to the full utilization of Paprinsa's production capacity, the synergies with the Barcelona plant and the revision of certain procurement contracts.

Founded in 1977, Paprinsa operates in the recycled White Lined Chipboard (WLC) business. The company has both its headquarters and mill in Mollerussa, just 130 km from Barcelona and less than one hour from the plant of RDM Barcelona Cartonboard. It manufactures 120,000 tons of recycled chipboard, with a potential capacity of 140,000 tons. Over the past six years, Paprinsa has made significant investments for more than EUR 30 million in its plant. Production includes a wide range of grades and grammages (from 180 to 550g).

Currently, Paprinsa is the No. 2 chipboard producer in Spain, and the eighth WLC producer in Europe. The paper mill has a trim width of 4.8 meters, which will make it the widest plant in RDM Group, as it is one of the largest paper mills of this sector in Europe. By further exploiting this size, RDM Group can count on a potential increase in the factory's production capacity from the current 140,000 tons a year to over 200,000 tons a year, in line with the other top plants today part of the Group.

The transaction closing is expected not later than March 31, 2021, subject to the fulfillment of some conditions precedent, including, besides the obtainment of some authorizations of labor-law and administrative nature, the obtainment of legal authorizations by the competent Antitrust authorities and the Integrated Environmental Authorization to increase the production capacity of the Paprinsa mill.

RDM Group, with headquarters in Milan, Italy, is the second largest European producer of coated recycled cartonboard, the largest in Italy, France and the Iberian Peninsula; RDM Group also produces virgin fibre cartonboard. For further information, visit: rdmgroup.com

SOURCE: RDM Group