Friday 23 June 2017

One51 scraps metals recycling unit as businesses sold to former owners

One51 chief executive Alan Walsh
One51 chief executive Alan Walsh
Donal O'Donovan

Donal O'Donovan

One51 has confirmed the sale of its Irish metals recycling business, in what the Irish Independent understands are a series of disposals to the previous owners.

The Irish Independent revealed in September that One51 was in advanced talks to exit the Irish metals business, part of its ClearCircle division.

Yesterday the company confirmed the sale in a short statement.

"One Fifty One plc, a leading plastics and environmental services operator, today announces that its ClearCircle Environmental division ("ClearCircle") has completed the disposal of its metals recycling businesses in the Republic of Ireland for an undisclosed consideration."

The sale is understood to be at a knock down price that will add little to One51 earnings this year.

One51 paid north of €200m at the tail-end of the last decade to buy metal recycling firms in Ireland and the UK. The acquisitions were made when former chief executive Philip Lynch headed the group.

Those investments were later written down by a total of around €90m, largely in 2011 and 2012, after a change of management at One51 which is now headed by Alan Walsh.

In 2012, a year after Mr Lynch left as One51 chief executive, the company said in its annual report that "relatively high multiples were paid for many of the businesses within ClearCircle Environmental's Irish metals recycling division".

One51 paid a combined €140m in 2007 to buy Hegarty Metals in Limerick, A1 Metal Recycling in Mountmellick, Co Laois, and Galway Metal. The owners of Hegarty Metals made a €56m gain on the sale to One51. The larger Cork Metal was sold by the O'Sullivan family.

The sellers were paid in a mix of cash and One51 shares, and in most cases stayed on to help manage the businesses. One51 declined to comment yesterday on the identities of the buyers or considerations paid for the businesses.

The metals recycling business was once One51's biggest operation, but was regarded as non-core by current management ahead of the sale.

One51 has shifted its focus to plastics, paying €201m last year for an almost 67pc stake in Canadian firm IPL, a manufacturer of injection-molded plastic products.

One51 posted revenue of €366m last year, 33pc up on 2014, primarily as a result of its stake in IPL.

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