Spicers, Australia’s second-biggest paper merchant, may soon be owned by a Japanese conglomerate, Kokusai Pulp & Paper, following confidential discussions between the two companies.
The board is recommending all shareholders vote in favour of a cash transaction for 100 per cent of the company’s shares, with directors committing their 26.6 per cent of the company to the deal. The vote will take place in June, with expected implementation in July if shareholders agree to the scheme.
Speaking to Australian Printer, chief financial officer Damien Power says the board is confident that shareholders will vote in favour of the scheme, which values the shares at 7 cents a piece including cash.
Power explains, “The feedback from shareholders has been overwhelmingly positive, while KPP is extremely happy to be acquiring the entirety of the Australian and New Zealand operations for Spicers.
“Subject to no superior going through, we are confident that shareholders will vote yes.”
It would be the second major acquisition from Japan in as many years, following Japan Pulp and Paper (JPP) acquiring both K.W. Doggett, and BJ Ball to create Ball & Doggett in 2017.
Power and David Martin, CEO, Spicers contend that any potential sale would be less disruptive than that last major paper merger, as the business is being purchased in full, with no plans for change.
They say, “They are buying the whole company, Spicers Ltd, as is, and have declared they intend to run it as is. KPP is a global business with aspirations to invest and grow, and they are excited to buy Spicers, we are their first overseas acquisition.”
Kokusai Pulp & Paper reached group sales of $4.8bn in its last FY, with some 956 staff across 26 sites globally, and listed on the Tokyo Stock Exchange in June.
A break fee of $1.1m is included in the scheme, which Spicers says is payable to KPP in certain circumstances. Australian Printer has clarified this would be applied in the event of a superior offer from a new party being accepted.
David Martin, CEO, Spicers, says, “Our business is in an excellent position and our strategic focus over the past two years has delivered improved value for our current shareholders. I see many advantages for the Spicers business in taking this step to become part of a successful, global, business with a willingness to invest for growth in our key revenue streams of Print & Packaging, Sign & Display, and Architecture & Interior Design. KPP has been a key business partner of Spicers for many years, and I believe having access to their global resources will provide opportunities for Spicers in many new markets and product categories.
“For us, it is business as usual, KPP are acquiring one business, we are not merging two, so there will be no disruption to market.
“It is a great story for shareholders and customers at the same time, and everyone is happy.”
Spicers recently sold its Asian division to Japan Pulp and Paper for the equivalent of $15.3m.
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