Less than a year after acquiring Spicers, Japanese paper giant Kokusai Pulp and Paper (KPP) is on the acquisition trail again, having signed a binding option to purchase the majority control of Antalis, the France-headquartered global paper, packaging and visual communications distributor with annual sales of around AUD$3.8 billion.
|Antalis is a major player in paper, packaging and visual communications consumables supply|
The deal effectively adds 40% to KPP’s existing revenues of around AUD$5.3 billion and was made possible following the May 2019 bankruptcy and subsequent liquidation of Antalis’ largest shareholder, Sequana, a holding company who, with over 75% ownership (82.5% of voting rights), was brought undone by insolvencies within its subsidiary Arjowiggins and an the inability to settle a dividend dispute with British American Tobacco for around AUD$280 million. Antalis itself was spun out as a separate Euronext-listed company in June 2017, so is relatively unscathed by the Sequana liquidation, other than to soon have a new owner.
The KPP offer is conditional on another Antalis shareholder, the public investment bank Bpifrance Participations, also selling its shares to KPP, representing and additional 8.5% of the share capital and voting rights. However, whereas Bpifrance will receive 40 Eurocents per share, Sequana receives just 10 Eurocents per share. Holders of the remaining 16.3% of Antalis shares will be offered 73 Eurocents per share for their holdings, likely followed by a ‘squeeze out’ by compulsory purchase of any remaining shares not taken up.
Concurrently to the binding agreement, a restructuring agreement has been signed between KPP, Antalis and the lenders of Antalis’ existing syndicated credit facility, providing for the refinancing of €100 million of the outstanding facility amount through a new financing granted by Mizuho Bank, and a write-off of the remainder. This write-off is conditional, notably, on the closing of the acquisition by KPP of Sequana’s and Bpifrance Participations’ shares held in Antalis. The outstanding facility amount as of 31 December 2019 was €287.1 million.
|Signage & visual communications are growing fast for Antalis|
Antalis’ Board of Directors wholeheartedly support the KPP deal. Following its meeting on 30th March 2020, they welcomed the planned combination with KPP, marking the successful conclusion of Antalis’ search for a new shareholding structure aimed at supporting the implementation of its strategic plan. The acquisition proposal submitted by KPP was selected following an open and competitive process.
The acquisition of Antalis by KPP is expected to create a world leader in the distribution of Paper, Packaging and Visual Communication on four continents - Asia, Europe, Australia and Latin America - with a strengthened offer of products and services to its customers and suppliers in all sectors and geographies. The newly formed Group should represent an annual turnover of approximately €5.3 billion, including 3.3 million tons of paper sold.
|Gary Bowles, Antalis Australia|
Locally, Antalis has offices in Chatswood, Sydney lead by Regional Manager Gary Bowles. Much of Antalis’ distribution is through Ball & Doggett, 100% owned by Japan Pulp & Paper, a rival to KPP. Given KPP’s ownership of Spicers, this tends to raise the spectre of how distribution will be handled going forward. Certainly, with Spicers’ strong position in signage and display, it would appear that Antalis’s visual communications portfolio - brand name Coala - would benefit both parties.
The Sydney Antalis office was contacted for comment. Wideformat Online will keep you posted on the progress of the take-over.
|Antalis Australian office, NSW, still sports the ArjoWiggins livery, but phone answers Antalis|