Dermot Desmond sells 25% One51 stake to Canadian investor

Stake sale may pave the way for flotation of One51

Dermot Desmond: he was  opposed to  a One51 flotation last year. Photograph: Cyril Byrne

Dermot Desmond: he was opposed to a One51 flotation last year. Photograph: Cyril Byrne

 

Businessman Dermot Desmond has sold his stake of about 25 per cent in One51, a rigid plastics manufacturer, to a Canadian firm in a move that may pave the way for the company to float on the stock market.

One51 said in a statement on Thursday that Mr Desmond’s IIU investment vehicle and “certain related parties” to the businessman had sold their stake in the company to Caisse de dépôt et placement du Québec (CDPD), a Canadian investment firm that manages public pension plans.

The Dublin-based group had partnered with CDPQ in July 2015 to acquire IPL, a leading North American manufacturer of injection-moulded plastic products for the food and bulk packaging sectors.

The latest move may pave the way for One51 to float on the stock market. The stake is currently worth about €70.8 million based on the €1.80 price at which shares in One51 are currently trading on a gray market operated by a number of Dublin stockbrokers.

However, it is believed that Mr Desmond sold the stock at a premium to the maximum €1.85 price he paid for the shares in recent years. His average purchase price was between €1.60 and €1.70 per share, according to market sources.

One51 pulled a planned stock market flotation in April last year following opposition from certain shareholders, including Mr Desmond.

Under chief executive Aidan Walsh One51 has sold off a number of non-core assets to focus on the global plastics business. Last month the company completed the disposal of CircleClear hazardous waste management company in the UK.

Strong organic growth

One51 saw its revenue grow by 18 per cent last year to €433.9 million, driven by strong organic growth and a full-year contribution from IPL, in which it has a controlling 66.7 per cent stake.

One51 has an agreement that it can buy the remaining IPL stake from the shareholders – CDPQ, which owns 22 per cent, and Canadian government agency Fonds de Solidarite, which owns 11 per cent – in 2021.

Alternatively, the other shareholders have the right to force One51 to buy them out in 2021. As such, the Dublin-based company has recorded that liability at €72.2 million at the end of last year.

It is believed that One51 will hold on until next year before making another attempt to float. The company is said to be in talks to buy plastics businesses on both sides of the Atlantic, with a deal in North America possible by the end of the year.