The proposed £1.4m restructure of compliance giant Valpak has prompted fresh questions from rivals about whether members are being offered the best possible deal for the business.
The proposed restructure, to be voted on by its 4,004 members later this month, would see the firm’s existing management buy 70% of Valpak, with German compliance scheme owner Greenpoint snapping up the rest.
Members of the UK’s largest compliance outfit will secure £340 each, a total of £1.4m, as an initial consideration if they sanction the deal. There would be a further £270 deferred consideration, some £1.125m in all, if the packaging regulations continue in 2013.
But several senior market figures raised questions with MRW about whether the deal represented the best offer possible for the scheme’s members, which are mainly companies obligated under packaging waste producer responsibility laws.
A senior market source said: “I would question where the strategic value is to this deal for members and why this is a better deal than one that would have offered a higher price.”
Another market source, who also declined to be named, said: “What has surprised people in the market is the low valuation placed on the company.”
Valpak marketing director Duncan Simpson said the offer was “fair and reasonable” but declined to comment on the value of other offers made for the company by external parties.
He added: “The board obtained professional advice in support of the decision to accept the original offer based upon the decision criteria used and its expectation of likely interested parties.”
The offer represents an improvement on an initial package made by the management team in August 2011. Simpson said the improved deal come after a “strategic future value” assessment had been carried out by Greenpoint (see story right).
Luxembourg holding company Greenpoint owns DSD - the company which manages the German packaging recycling system - and owns and licenses the well-known Green Dot recycling trademark.