ASX-listed Pro-Pac Packaging (PPG) has raised $54.8 million to partially fund its $177 million acquisition of flexible packager Integrated Packaging Group (IPG).
Pro-Pac, headed by former Australia Post boss Ahmed Fahour, rolled out its fully underwritten capital raising plan last month, offering eligible shareholders a two-for-three entitlement offer at 34 cents per new share.
When the offer closed earlier this week, shareholders had taken 133.5 million new shares to raise $45.4 million dollars - representing a take-up of about 83 percent.
The balance of 27.6 million shares will be allocated to Bell Potter Securities, in accordance with the underwriting agreement. PPG expects the new shares will be issued on 6 November and will begin trading on the ASX the following day.
The acquisition of IPG, announced in September, is being funded by the capital raising as well as a combination of $60 million Pro-Pac shares issued to the vendors and $70 million from a new debt facility.
“The acquisition of IPG represents a significant milestone in the realization of Pro-Pac’s vision to become the preeminent flexible and industrial packaging manufacturer and distributor in Australia,” said Fahour, executive chairman, Pro-Pac Packaging. “The opportunity to combine two very complementary businesses will deliver significant long-term value to Pro-Pac shareholders.”
Pro-Pac has distribution facilities in Sydney, Melbourne, Brisbane, Perth and Adelaide as well as six manufacturing sites, providing flexible and rigid packaging solutions.
Integrated Packaging Group, formerly owned by private equity firm Advent Partners, operates five manufacturing facilities across Australia and New Zealand, providing a wide range of stretch plastic film used to wrap consumer goods, building products and agricultural products.
The new entity will operate 22 distribution warehouses and manufacturing facilities in Australasia and will have annual sales of about $450 million.