Deland, FL – ARC Group Worldwide, Inc intends to purchase RM2. ARC, a leading global provider of advanced manufacturing, says that it will sell its current operating businesses and assets (Legacy Business Sale) with plans to acquire RM2 International S.A. RM2 has developed a composite pallet that includes “smart” Internet of Things or (“IoT”) technologies to improve logistics.
“We consequently believe undertaking the Legacy Business Sale and pivoting to acquire RM2 can unlock exceptional value for ARC shareholders.”
RM2 issues, retrieves, and sanitizes more than 1.5 million of its hygienic IoT pallets annually through a nationwide network of over 30 service facilities in a cost-effective, scalable, and environmentally sustainable pallet pooling system. To date, the company has invested more than $60 million into its research and development initiatives. It focuses on industries such as food and other applications where hygiene is of extreme importance.
RM2 embeds autonomous IoT sensor technology in its logistically-optimized, hygienic BLOCKPal™ composite pallets. IoT sensor data are transmitted to the cloud via the LTE-M network, making visible the pallet’s location and condition both indoors and in transit without requiring any additional hardware or information technology development. RM2 ELIoT®, the RM2 cloud-based supply chain intelligence platform, captures and contextualizes location, temperature, shock, and event data, giving customers end-to-end supply chain visibility and clear, actionable insights in real-time.
ARC states that the global demand for pallets is estimated to be 9.1 billion units by 2024. Part of this demand is being met by suppliers with the Pallet-as-a-Service or per-trip model as opposed to purchased and owned outright by customers. The potential Pallet-as-a-Service market in the U.S. currently is estimated to represent 224 million units and it is currently served by approximately 104 million pallets, the majority of which are wooden.
ARC further believes that hygienic non-wooden pallets are increasingly finding favor with end-users. To cite a few examples, it notes that a leading poultry processor has disallowed wooden pallets from its suppliers, while a large big-box retailer has announced a non-wood initiative.
“RM2 is in the process of deploying their innovative and proprietary IoT technologies that have the potential to revolutionize durability, dependability, security and digital communications to create transformative efficiencies across the entire continuum of global logistics,” stated Alan Quasha, Chairman of ARC. “We consequently believe undertaking the Legacy Business Sale and pivoting to acquire RM2 can unlock exceptional value for ARC shareholders.”
“We are delighted with the opportunity to partner with ARC in a manner that we believe will accelerate the dynamic growth and expansion of the RM2 business,” added R. Ian Molson, Chairman of RM2.
The Company plans to effectuate the acquisition of RM2 in a share exchange transaction with the principal shareholders of RM2, pursuant to which the shareholders of ARC immediately prior to the transaction will own, in the aggregate, approximately 25.0% to 30.0% of the combined common stock of the Company after closing the RM2 acquisition, subject to adjustments with respect to the treatment of outstanding options and attainment of certain RM2 performance objectives.
ARC has committed to applying approximately $30 million in anticipated net proceeds resulting from the Legacy Business Sale to the business and operations of RM2. Founded in 1987, ARC currently holds a portfolio of advanced manufacturing technologies and capabilities to improve the efficiency of traditional manufacturing processes and accelerate time to market. In addition to metal injection molding, ARC has significant expertise in prototyping, advanced tooling, automation, machining, plastic injection molding, lean manufacturing, and robotics. ARC’s mission is to bring innovation and technology to manufacturing.
As part of a series of transactions related to the acquisition of RM2 by ARC, a group of existing and new investors to RM2, including PMB Invest Fund I SCSp, Everest Hill Group Inc., and two other prominent investors, are expected to invest in the aggregate approximately $20 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.
Source: ARC Group Worldwide