One51 set to offload its metal units in Ireland
One51, the Irish plastics and environmental services group, is selling its Cork Metal recycling business and understood to be in advanced talks to offload its other metals recycling operations here, the Irish Independent has learned.
It's believed previous owners of the businesses - most of whom stayed with the firms to help run the operations as part of One51's ClearCircle division - are in line to buy them back for far less than they sold them.
One51's single biggest shareholder is financier Dermot Desmond, who owns almost a 21pc stake through his IIU investment vehicle.
Other One51 shareholders include beef baron Larry Goodman, as well as co-ops Kerry, Dairygold and Lakelands.
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.
It has four metals recovery business in Ireland, including operations in Galway, Cork, Limerick and Laois. It also has metals recycling businesses in the UK.
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.
They received part of their sale proceeds in One51 shares.
In 2013, Nama took control of John Hegarty's 3pc stake in One51 on foot of a €15.5m judgment against the businessman and four other parties. In 2008, One51 acquired Cork Metal, and businesses in Manchester and the south of England.
Cork Metal was sold by the O'Sullivan family. Noel O'Sullivan continues to work for the business as part of ClearCircle. Cork Metal generated turnover of €23.9m in 2007, and a pre-tax profit of €5.4m.
In 2012, a year after Mr Lynch had been ousted 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".
The metals recycling business was once One51's biggest operation.
In 2011, the unit generated €190m in turnover, which represented 86pc of group turnover.
By 2014, revenue from its metals business had dropped to €116.8m, with EBITDA of €5.9m. The company has since refocused, increasing its exposure to plastics.
Last year, it paid €201m for almost a 67pc stake in Canadian firm IPL, a manufacturer of injection-molded plastic products.
One51, whose chief executive is now Alan Walsh, posted revenue of €366m last year, 33pc higher on 2014, primarily as a result of its stake in IPL. EBITDA before exceptional items rose to €36.1m from €21.6m.
One51 cancelled a planned stock market flotation this year. It's believed Mr Desmond raised concerns that the flotation could dilute his stake.