One51, the rigid plastics manufacturer, said on Friday it has received an indicative and conditional €2.50-a-share offer from UK private equity firm CapVest, valuing the company at about €408 million.
However, CapVest, led by Cavan man Séamus Fitzpatrick, would likely have to spend an additional €118.1 million to make good on One51’s current plans to buy out two Canadian firms’ combined 33 per cent stake in North American plastics company IPL.
One51 owns the remaining 67 per cent stake in NPL, its largest division, which accounts for 80 per cent of group revenues.
CapVest’s “approach is preliminary in nature and is subject to various preconditions, including due diligence and financing, and there can be no certainty that an offer will ultimately be forthcoming or as to the terms of any offer,” One51 said in a statement on Friday.
“Discussions are at an early stage and a further announcement will be made as appropriate. Shareholders are advised to take no action at this time.”
The development comes as One51 is in the process of seeking support from its shareholders to reorganise its structure and that of IPL, which makes everything from yoghurt pots to refuse bins, ahead of a planned initial public offering within 12-18 months in Dublin and Toronto.
One51's blueprint has centred on two Canadian firms, Quebec-based Caisse de Dépôt et Placement du Québec (CDPQ) and Fonds de Solidarité, swapping their 33 per cent stake in IPL for a direct stake in One51, the parent company.
Figures in a One51 investor presentation, seen by The Irish Times, as well as the terms of CapVest's offer for the group suggest that the Canadian firms' IPL stake may be worth €118.1 million. That's up sharply from the €83.4 million price at which the IPL stake had been recorded as a contingent liability on One51's balance sheet at the end June, due to the Canadians' right to sell their holding to the Irish company in the future.
Markets sources said on Friday evening that CapVest could make an offer that would allow the NPL “swap up” share deal to go ahead and acquire One51 with an enlarged number of outstanding shares. Alternatively, it could bid to purchase One51’s existing shares and subsequently make a bid to buy CDPQ and Fonds de Solidarité’s NPL stake.
CDPQ is also One51’s largest shareholder, having taken over businessman Dermot Desmond’s 25 per cent stake in the company earlier this year for an undisclosed sum.
CapVest made an initial approach a little over two years ago to buy One51. The UK firm also owns majority stakes in the Mater Private Hospital in Dublin, which it refinanced last year after abandoning an attempt to sell the business, and Valeo Foods, which is behind brands such as Jacob's biscuits, Odlums and Batchelors.
One51 was set up in 2005 as an investment business spun out of food and agri group IAWS. It initially held assets including a 26 per cent stake in infrastructure company NTR and Irish Pride Bakers. IAWS subsequently renamed Aryzta.
Chief executive Alan Walsh has spent his seven years in charge of One51 unravelling the firm's collection of disparate investments, including a major stake in ferries operator Irish Continental Group.
The company virtually completed its divestment programme in the first half of this year with the sale of CircleClear, its UK and Irish hazardous waste businesses.
One51 posted a 33 per cent increase in earnings before interest and tax in the first half of €20.1 million, driven by its IPL unit.