Antalis has found a safe harbour in Kokusai Pulp and Paper, one of Japan’s largest paper groups with ambitions for global expansion.
Antalis has been frozen since major shareholder Sequana went bankrupt in May last year. It has been seeking a buyer since. Unsurprisingly the deal has been welcomed. “Antalis, its management and employees are very pleased with this combination with KPP, which will allow it to open a new chapter in its international evolution. It will provide Antalis with the necessary means to support its development and strengthen its market position,” says Hervé Poncin, Antalis CEO.
KPP has already grown into China and elsewhere in Asia, has acquired two merchants in Australia and has operations in North America. But until now it has had no activity in Europe.
It creates a group with annual sales of €5.3 billion and selling 3.3 million tonnes of paper. It also collects more than 1.5 million tonnes of paper a year for recycling. The deal adds the largest paper merchanting group outside the US with 4,700 and dealing with 115,000 customers across 39 countries from 117 locations.
Antalis will contribute sales of €2.01 billion, down 8.6% of 2018 and reflecting an 8% drop in paper consumption in Europe. Its operating profits of €54 million (€74million) were helped up by a strong performance from packaging materials and visual communications.
The deal also ends a year long search by Antalis to find new shareholders able to support the business through transition as conventional paper shipments fall while packaging and large format materials increase.
The deal will be structured in two parts. Firstly, Kokusai has agreed to buy the majority shareholding held by Sequana and Bpifrance Participations, amounting to the vast majority of the shares in the business. It will pay 0.10 euro for each Sequana owned share, amounting to 75.2% of the business and 0.40 euro for the 8.2% Bpifrance Participants holds. It will then issue a tender offer for the remaining shares at €0.73/share.
At the same time €100 million of the company’s debt is being refinanced through Mizhou Bank with the remainder of the debt being written off. Antalis had €346 million net debt at the end of 2019, increasing from €288 at the end of 2018.
The deal means that in the last 12 months each of the three leading UK merchant groups has changed hands. Premier Paper was acquired by Japan Pulp and Paper in July, while Demaur Paper Media was purchased by Harry Gould Jnr and brother Robert in May last year. The pair had sold their US centred paper supply business to Japan Pulp & Paper in 2015.
Antalis will become part of Kokusai Pulp & Paper, to be part of a worldwide paper and allied products supplier handling more than 3 million tonnes of paper a year across Europe, Asia, Australasia and America.