Veteran IPL Plastics investors to own less than half of firm after IPO

Some 2,000 long-standing shareholders in Dublin-based IPL Plastics, formerly known as One51, are set to see their stake in the company watered down to less than 50 per cent as it prepares to raise fresh money and float on the Toronto stock market this year.

IPL Plastics, which stems from an investment business spun out of food and agri group IAWS (now Aryzta) in 2005, plans to raise about 200 million Canadian dollars (€125.4 million) in its initial public offering (IPO), sources said on Tuesday, confirming a Bloomberg report.

Based on a current estimated equity value on the company of €450 million, the fresh funds raised on an IPO would dilute the combined stake of original shareholders – including farmers, dairy co-operatives and high-net-worth individuals – to about 45 per cent from 57 per cent now.

That assumes that none of these investors subscribes for new stock in the deal, that valuation multiples for North American packaging companies remain at current levels and that the Canadian dollar does not move dramatically against the euro.

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Two Canadian firms, Caisse de Dépôt et Placement du Québec and Fonds de Solidarité, whose combined IPL Plastics stake rose to 43 per cent in recent months, would see their interest watered down to about 33 per cent under the IPO.

Rise in earnings

IPL Plastics, now a focused maker of rigid plastics used for everything from yoghurt pots to refuse bins, said earlier this month that its earnings from continuing operations rose 46 per cent last year to €70.9 million to outpace a 36.2 per cent surge in sales, to €474.4 million.

The Irish Times reported on March 9th that the company had hired three Canadian investment banks – BMO Capital Markets, CIBC and Royal Bank of Canada’s capital markets division – to help it prepare for an IPO as soon as the middle of the year.

In order to qualify for a Canadian listing while keeping its headquarters and management team in Ireland, IPL will set up a holding company domiciled in Canada in the coming months. The company decided recently against pursuing a dual listing in Dublin.

The group’s chief executive, Alan Walsh, has spent more than six years unravelling the company’s previous collection of disparate investments, including a major stake in ferries operator Irish Continental Group and Irish Pride bakery.