IPL Plastics to buy Belgian firm Loomans for €75m

IPL Plastics, formerly known as One51, said on Friday that it has agreed to buy Belgian peer Loomans Group for $85.5 million (€75m) as the Dublin-based group reported its earnings dipped last year amid rising input and distribution costs.

The company, which floated on the Toronto stock market last June after raising 191.7 million Canadian dollars (€126.8m) in an initial public offering (IPO), said the Belgian deal, which will be financed using existing cash resources and borrowings, will be integrated into its consumer packaging solutions in Europe.

“Loomans has a well-established, blue chip customer base in continental Europe, and provides IPL Plastics with a strong platform for growth in this region,” the company said, adding that it had been keeping an eye on the business since 2015.

The deal will also help lessen the group’s dependence on the North American market.

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The full-year results for 2018 show that sales at IPL Plastics rose by t 23 per cent to US$657.8 million last year. However, earnings before interest, tax, depreciation and amortisation (ebitda) dipped to $78 million from $80 million. The company reports financial results in US dollars, while its shares are quoted in Canadian dollars.

"The 2018 results were satisfactory given the sustained increases in resin, labour and freight throughout the year, and the significant level of restructuring initiatives completed by management to transition to a fully-listed public company in June 2018," said chief executive Alan Walsh.

Bulk containers

The group said its returnable packaging solutions (RPS) business, which makes bulk containers for the agricultural sector, “is experiencing trading issues due to weather and seasonality”, which is dampening the division’s sales. It said earnings in this unit for 2019 would be “at least in line with 2018”.

The company’s large format packaging and environment solutions (LF&G) business, where products include refuse bins as well as food containers and crates, and its consumer packaging solutions (CPS), which makes yoghurt pots to soup containers, “are trading satisfactorily”.

IPL Plastics’s management expects that capital spending on property, plant and equipment to fall to between $32.5 million to $37.5 million this year as a major investment programme comes to an end. The company’s capital expenditure amounted to $52.9 million last year.

Legacy Irish shareholders who remained with the company when it floated received new class B shares in IPL Plastics in return for their old stock last June. They had to wait until December 28th, six months after the stock market launch, before the class B shares converted could be traded, as is normal in Canada.