Plastics Capital (United Kingdom) - Dec 2007

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01 December 2007

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Octopus Private Equity has floated portfolio company Plastics Capital Plc on AIM enabling it to repay its loan notes in full. The niche plastics manufacturing group floated with a market capitalisation of £26.85m, equivalent to an enterprise value of £35m. Octopus remains the largest single shareholder in the business following the listing and saw returns of 2.1x and a 41% IRR from its partial exit. The IPO has also enabled minority shareholder Investec Growth & Acquisition Finance to exit in full generating an IRR of more than 45% on its investment. Andrew Cavaghan led the deal for Octopus and Ed Cottrell led for Investec.

Previous funding

Octopus led a £3.1m round of equity funding in late 2005 and has subsequently supported the company with further acquisition funding to enable it make five bolt-on acquisitions (16 January 2006, page 21). The 2005 funding round enabled Plastics Capital to acquire two niche manufacturing businesses and formed part of a total £11m round. Octopus subsequently supported the company with the acquisition of three additional complimentary businesses. Investec participated in this round of funding, having already provided the business with a £3.2m equity, mezzanine and senior debt package in November 2004. Since 2005, the size of the business has trebled to proforma revenue of £25m and profits of £5m. Octopus helped the company originate these opportunities and also provided strategic input on evaluating these opportunities and on operational matters. Plastics Capital employs 240 staff. The Battersea-based business was founded in 2002 and has factories in Knaresborough, Leicester, Dartford, Poole and Wellingborough. Its products include bearings for office machinery, mandrels for manufacturing hoses and matrices for creating creases in packaging.