Apollo makes first deal from Impact strategy

Cascades and CDPQ were the company's largest shareholder's prior to Apollo's offer. Cascades owned a 57.6% stake in the company, the firm said in a statement.

The offer will see the GP acquire 251,974,385 ordinary shares at 145 euro cents apiece via Rimini BidCo, implying a total value of more than €365m. Cascades' shares are valued at around €315m, according to a statement from the company.

The pricing represents a 24% premium to RDM's 90-day volume-weighted average share price, the GP said in a statement. The valuation equates to a 6.9x multiple of RDM's last-12-month adjusted operating income before depreciation to 31 March 2021, according to a statement from Cascades.

The company had a market capitalisation of almost €549m at the time of publication.

The deal is expected to close in Q3 2021, following which Apollo is to launch a mandatory tender offer for the company's remaining shares, with the intention of taking the company private.

The GP said in a statement that it has debt financing commitments from international banks to back the deal and any potential refinancing.

Apollo's Impact strategy was launched in 2020 and focuses on five main sectors: economic opportunity; education; health, safety and wellness; industry 4.0; and climate and sustainability. The GP said in a statement that it expects RDM will continue to benefit from shifts in consumer preferences for sustainable materials, as well as from EU regulations that aim to support the use of sustainable and recycled fibres.

Mutares acquired France-based folding boxboards producer La Rochette from RDM in February 2021, as reported. RDM had acquired the company in March 2016 from Cascades.

Company
RDM produces recycled cardboard packaging, and operates in Italy, France and Iberia. Headquartered in Milan, the company was founded in 1967; in January 2021, Reno De Medici Group, Cascades La Rochette and Careo Group were merged, forming RDM Group. The company's product range includes coated recycled cartonboard and white lined chipboard, as well as packaging for applications in the publishing industry and luxury packaging.

The company posted gross EBITDA of €12.7m and sales of €153m in the year to 31 March 2021, according to the company's latest financial report

People
Apollo Global Management – Andrea Moneta (senior adviser for Italy); Marc Becker (senior partner, co-lead of Apollo Impact).
RDM Group – Michele Bianchi (CEO).
Cascades – Mario Plourde (president, CEO).

Advisers
Equity – Allen & Overy (legal); Paul Weiss Rifkind Wharton & Garrison (legal).
Vendor (Cascades) – Jones Day (legal); Rothschild & Co (corporate finance).
Vendor (Caisse de Dépot et Placement du Québec) – Latham & Watkins (legal).

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