Dublin-based IPL Plastics, formerly known as One51, expects to float on the Toronto Stock Exchange at a market value of as much as $861.8 million (€573 million) next month.
That is based off an indicative price range of 13.50-16 Canadian dollars per share at which the company said on Tuesday it plans to issue new stock and raise up to C$200 million in its upcoming initial public offering (IPO). The range points to a valuation of between C$553.36 million and C$661.76 million for the company before the new equity is raised.
“The range is very much in line with what I would have expected,” said Noel O’Halloran, chief investment officer at KBI Global Investors in Dublin, who manages the New Ireland Fund that holds IPL Plastics’s grey-market traded shares. “[It’sof stock in the meantime.
Buy-back offer
The price of that buy-back offer will be set at the IPO price, though group chief executive Alan Walsh indicated last week that he expected "minimal" uptake from existing shareholders for the buy-back offer.
The price range reflects the fact that shareholders last week approved a share consolidation at the company, where existing shareholders will receive five shares in a new holding company to be listed in Toronto in the second half of June for every one share they currently hold.
While US rival Berry Group has seen its shares fall by 13 per cent in less than a month in New York as it reported weaker-than-expected quarterly earnings, IPL Plastic’s share price has declined just 2.5 per cent over the same period to €1.95.
North America-focused IPL Plastics said last week that its profit margins remained under pressure in the first quarter of 2018, having been squeezed in the second half of last year as raw material resin prices spiked and US freight costs increased amid tougher rules on truck driving times.
Acquisition
The group’s earnings have been driven in recent years by its 2015 acquisition of a 67 per cent stake in North American company, IPL, with two Canadian firms left holding the remaining stake. Earlier this year, the Canadian firms – Caisse de Dupot et Placement du Quebec (CDPQ) and Fonds de Solidarité – swapped their interest in IPL for shares in the group in a deal worth almost €120 million.
CDPQ had bought out businessman Dermot Desmond’s 25 per cent stake in IPL Plastics, then known as One51, a year ago. The firm and Fonds de Solidarité currently own about 43 per cent of the business between them.
Last week, Mr Walsh confirmed that the company is looking at “a few” potential continental European acquisitions, which would help rebalance the geographical exposure of the group.
