It runs to Piazza Affari Reno De Medici, which leaps by 3.86% to 1.45 euros. The news that Cascades has signed a contract with a company owned by funds managed by investee companies of Apollo Global Management, for the sale of its 57.6% stake in the second largest European producer specialized in the production of cardboard on a recycled basis for a price of € 1.45 per share, corresponding to a total net consideration of approximately € 315.3 million.
The Apollo funds will therefore acquire approximately 67% of the share capital of Rdm from the two largest shareholders of the company, namely Cascades and Caisse de depot et placement du Quebec, at a price of 1.45 euros per share (without adjustments, except for specified below), corresponding to a premium of 24% compared to the weighted average price for the volumes traded in the last 90 days, as well as a multiple of 6.9 times on the adjusted operating profit before the writedowns of the last 12 months of the Rdm as at 31 March 2021. The completion of the transaction is expected by the third quarter of 2021. Following the completion of the transaction, Apollo will launch a mandatory takeover bid on the remaining shares aimed at delisting the company.
Upon completion of the recently announced acquisition of Eska Group, the RDM group’s production capacity will grow to nine factories and five specialized cutting and distribution centers in Europe and the USA. The completion of the transaction is expected to take place in the third quarter of 2021, subject to the fulfillment of the usual conditions precedent, including the necessary antitrust authorizations.
In the event that the delisting should not be carried out at the end and due to the effect of the Mandatory Offer, the delisting may be carried out through the merger of the Issuer in Rimini or in another company controlled by the Apollo Funds. Apollo expects the RDM Group to continue to benefit from growing changes in consumer preferences and European-wide regulations enacted to support the use of sustainable and recycled fibers.
“The enhancement of our investment in RDM reflects our commitment to create long-term value for the company and our shareholders,” commented Mario Plourde, president and chief executive officer. “The moment of this sale allows Cascades to liquidate the value generated by RDM’s multi-year transformation initiatives, which have helped support the significant increase in Reno De Medici’s share prices over the last year. From a strategic point of view, the exiting Europe is aligned with our plan to focus on strengthening the competitive position of our core packaging and tissue paper businesses in North America.
To that end, the proceeds from the sale will go to support strategic modernization initiatives currently underway and key projects to enable Cascades to strategically return equity to shareholders and proactively manage our debt profile. “” Today’s announcement marks the end. of a 35-year history of operational presence in Europe by our company. Although Cascades is turning the page to focus on North America, we are convinced that the Apollo team will be an ideal strategic partner to support RDM’s future growth. We would like to thank Michele Bianchi and the Reno De Medici management team as well as all the employees for the positive and successful partnership we have shared in these many years “, he concluded.
Going into detail, Rimini BidCo Srl, a newly established company controlled by the Apollo Funds, and the two major shareholders of RDM, namely Cascades Inc. and Caisse de depot et placement du Quebec, have signed two distinct definitive share purchase agreements which provide for the purchase by Rimini of a total of 251,974,385 ordinary shares of RDM, representing approximately 67% of its share capital, at a price of 1.45 euros per share.
At the closing, Rimini will hold 251,974,385 shares, equal to approximately 67% of the Issuer’s share capital, and will therefore be required to promote a mandatory takeover bid on all the residual shares of RDM, at the highest price. per Share paid to sellers. Rimini will finance the operation, including any refinancing of the Issuer’s existing debt, through a combination of own funds and a bank loan for which a commitment has already been obtained for the whole from international banks. of primary standing.
Finally, it should be noted that there are 241,114 convertible savings shares of the issuer, not listed on any regulated market, which, pursuant to the provisions of the issuer’s bylaws, are convertible into ordinary shares at the request of the relative holders, in the months of February and September each year. In case of promotion of the mandatory offer, this must also include all the ordinary shares deriving from the conversion of the convertible savings shares (provided that these shares have been converted before the term of the Mandatory Offer).
“Already among the leaders in Europe in the recycled-based cardboard sector, Rdm is well positioned for continuous growth, as more and more companies have decided to replace plastic with sustainable packaging. We consider Rdm a proven platform for inorganic growth and we look forward to collaborating with Michele and the Company’s management team in order to continue to grow the Company’s business by pursuing an ever greater positive impact on the environment “, comments Marc Becker, Senior Partner and Co-Lead of Apollo Impact.
“As the first investment driven by the Apollo Impact platform, RDM fully embraces our strategy of seeking viable companies in which we believe we can direct profitability and performance in order to increase the positive effects for society and for the planet”. “We are thrilled to be able to work with Apollo in this next phase of growth for RDM. Over the past five years our exceptional team has made significant progress in growing our platform and optimizing our operations across Europe” says Michele Bianchi. , CEO of the Rdm group.
“Looking to the future, we are equally enthusiastic about the commitment, shared by Apollo, to the circular economy, of which we are both contributors and beneficiaries. We look forward to trying our hand at our ambitious sustainability goals, so as to contribute to a better future for all our stakeholders “.
Andrea Moneta, Apollo’s senior advisor for Italy, adds: “Rdm highlights the important role that Italy is playing in building a more sustainable global economy and Apollo’s commitment to collaborate with the best Italian companies, entrepreneurs and managers, to support their long-term growth “. Allen & Overy and Paul, Weiss, Rifkind, Wharton & Garrison acted as Apollo’s legal advisers. Jones Day and Rothschild & Co. acted as legal counsel and financial advisor to Cascades Inc., respectively. Latham & Watkins acted as legal counsel to Caisse de de’pot and placement du Que’bec.