Paprika

Presentation of the company

Created in 1979, Priplak is active in the polypropylene sector. The company, managed by Thomas Godey, has 60 employees and is based in Neuilly en thelle.

The company’s main activity is the production and sale of polypropylene sheeting in various thicknesses, grains and colours. The Priplak® product is a flexible and resistant plastic sheet intended for communication, packaging, filing, storage and decoration products. the company has more than 2000 references and makes 70% of its sales in special productions.

The company works with 400 customers (key account customers and distributors) in some 40 countries in Europe and North America. France remains its main market with 39% of sales.

The quality of its industrial facilities and its expertise make the Company the European leader in the 5 main market segments addressed by its activity (presentation, classification, label, packaging, POS) with a 30% market share.

Priplak is own by Arjowiggins group (currently in receivership situation) and is the only profitable company of the group. 

Project Description

The Arjowiggins group wants to sell his activity valued on standard of the market. the management via a dedicated company wish to borrow 500 000 € over 36 months to finance the acquisition of the company. This project will be realised in the next few months.

The amount offered on the platform is limited to 245000€, which is in line with the regulatory limits.

Analyst’s Opinion

The borrower is a holding company dedicated for the acquisition whose revenues are derived from services invoiced to its subsidiaries. The financial analysis was carried out on the financials of the target company.

With a turnover of 22 487 000 € in 2017 and an experienced team, the company has a good track record combined with a strong operating margin.

In 2017, the decline in profitability is linked to an increase in the purchase price of raw materials.

In 2018, turnover is expected to reach 24Mio €. The forecast is based on the level of tunover and lower profitability than 2017.

The borrower has a good repayment capacity with a forecast FCCR (Fixed Charge Cover Ratio *) at 1,19 and a strong financial structure, with a forecast net debt / ebitda ratio of 2,5 and a net debt / shareholder equity of 91% taking into account the new shareholder structure after acquisition. 

The analysis of the project leads to a credit rating of C and a 7,5% annual interest rate.

*The multiple of FCCR at 1,19 means that the company has a safety margin of 19% relative to its ability to repay its credit maturities.

The expert opinion is given as an indication on the basis of the elements provided by the project holder and information from our databases (External data provider). This opinion is only an element of reflection in the decision making of a lender to participate in the financing of a project.

Strong points:

• Good historical performance based on diversified client base.
• Solid repayment ability with a forecasted FCCR of 1.19
• European leader in its market with a strong reputation for the Priplak brand

Points of caution:

• Variation of the price of raw materials

• New operating mode out of the previous group context