US private equity giant Madison Dearborn Partners is advancing plans to sell its controlling stake in Irish-headquartered packaging group IPL Plastics in a deal that is expected to value the business at as much as $1.5 billion (€1.35 billion).
Canadian asset manager Brookfield is reported by deals publication Debtwire to be among parties to have submitted second-round bids for the business, which has been run by chief executive Alan Walsh for the past 13 years.
Madison Dearborn, which acquired IPL Plastics off the Toronto stock market in 2020 for at an enterprise value of $736 million and has backed the business in carrying out follow-on deals, hired investment bankers at Evercore and BMO earlier this year to run a sales process. A spokesman for IPL Plastics declined to comment on the process.
IPL Plastics, whose products span from food containers to wheeled bins, was once known as One51.
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That company was set up in 2005 as an investment business spun out of food and agri group IAWS (now Aryzta), and initially held a diverse range of assets from a stake in infrastructure company NTR to Irish Pride Bakers.
Mr Walsh has spent his first six years at the helm unravelling the group’s collection of disparate investments, including a major stake in ferries operator Irish Continental Group, to turn it into a focused rigid plastics company.
In June 2018, the group, by then renamed as IPL Plastics, floated in Canada.
The sale to Madison Dearborn in 2020 saw legacy Irish investors from One51′s early days, including farmers, dairy co-operatives and high-net-worth individuals, exit.
However, major shareholder Caisse de Dépôt et Placement du Québec rolled almost 25 percentage points of its then 27 per cent stake into the Madison Dearborn deal in 2020.
IPL Plastics is reported to be currently generating about $160 million of annual earnings before interest, tax, depreciation and amortisation. That is up from $91.5 million in 2019, its last year as a public company.
Under Madison Dearborn, the group has reportedly spent about $50 million a year on a capital expenditure programme, in addition to carrying out a number of acquisitions.
Purchases during the period include Leaktite, a leading player in the manufacture and distribution of buckets to the retail sector in the US; Coral Products and Interpack Limited, manufacturers and distributors of plastic and blow molded products; and Bright Green Plastics, a UK-based plastic recycling firm.
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