Ketchup bottle maker in £509m takeover of US rival

THE British plastic packaging giant that makes Heinz tomato ketchup bottles has bought an American rival for £509m.

FTSE 250 firm RPC, which also makes packaging for Nivea suncream and Dulux’s new plastic paint cans, is buying Letica, a US company that makes plastic cups, tubs and trays, in a bid to extend its reach in North America.

The Northamptonshire-based firm said the takeover will see it control Letica’s 13 manufacturing facilities across 11 states, boosting its earnings in the region from 9pc to 18pc.

It is the latest acquisition for the company, which has been on a spending spree since unveiling its 2020 growth strategy.

The firm spent £329m on Icelandic butter-tub maker Promens in late 2014, £553m on French bottle top maker Global Closure Systems the following year and £261m on polythene film maker British Polythene Industries last June.

In December, it bought wheelie bin maker ESE World BV for £223.4m.

Unlike its rivals, RPC has been able to invest quite heavily in product design despite economic uncertainty, due to its decentralised nature.

It operates in more than 30 countries and claims to focus on areas in the market where it can add value through innovation.

The firm was among the first to introduce plastic paint tubs, which are lighter and less prone to breaking than traditional metal tins.

It designs and manufactures plastic packaging for all the major brands, including L’Oreal, Unilever and Nestle, and said the latest purchase would enable it to target new American clients through Letica’s customers.

RPC was created in 1991 as part of a management buyout of five plastic packaging businesses, and listed on the London Stock Exchange in 1993.

It employs more than 21,000 people, has more than 700 patents to protect its product design and technology and made more than £2bn in sales last year.

It said yesterday that revenues for the third quarter of its financial year ‘increased significantly’ compared to the same period last year due to the positive effect of foreign exchange changes and growth. To fund the acquisition, RPC has conducted a rights issue of almost 83m shares at 665p each to raise £552m – a 37.2pc discount on its closing price of 1059p per share on Wednesday.

The rights issue will fund further acquisitions as well as some of those already made.