DECEMBER 2021
million into RM2 to fund the Company’s growth.
Subject to the approval by the ARC shareholders at the annual meeting, ARC plans to consummate the Legacy Business Sale and the RM2 acquisition on or about January 31, 2022.
Dutch Star Companies TWO and Cabka Confirm Exclusive Discussions
By far, the biggest dollar amount being talked about in this month's M&A activity is with Cabka's proposed relationship with Dutch Star Companies TWO (DSCT), an investment company. Cabka is the largest recycled content plastic pallet producer in the world, valued at around $283 million (EUR 250M).
Cabka recycles plastics from post-consumer and post-industrial waste into innovative reusable pallets and large container solutions. Based on over 25 years of experience as a dedicated family business, Cabka uses in-house developed patented expertise to recycle, process, and produce its products. With its own R&D center and production facilities in Europe and the United States, Cabka recycled plastic products are sold to blue-chip clients in the food and beverage, retail, automotive, chemical, pharma, and pooling industries in more than 80 countries.
Under the proposed terms of the agreement, DSCT would buy out two passive shareholders for $71 million (EUR 63M) and also inject a further $53 million (EUR 47M) to support company growth goals.
The envisaged Business Combination has already received strong support from the Boards of both companies and a select number of large DSCT shareholders. Nevertheless, the parties cautioned, these discussions are ongoing and there can be no certainty that this will result in a business combination. An update on further developments, they stated, will be given in due course.
This roundup caps the end of a busy year for M&A activity within the pallet sector. As the financial community increasingly focuses on the potential value of the pallet operations, watch for continued dealmaking - fueled in part by synergies, economies of scale and scope (more volume of the same item and related items), not to mention the potential for increased market power for larger players in the industry.