IPL listing will dilute current stakes by 20pc
Investors in IPL Plastics will have their stakes in the Dublin-based group watered down by 20pc when it lists on the Toronto stock exchange next month at a valuation between C$553.36m (€367m) and C$661.76m.
Yesterday the North America focused rigid plastics producer unveiled an indicative price range of C$13.50-C$16.00 (€9 to €10.60) a share for the long-awaited listing.
That equates to a multiple of 8.5 to 9.5 times earnings, based on projected 2018 numbers outlined in the preliminary prospectus.
Investors will see their stakes diluted to 80pc unless they subscribe for new shares in the deal, which is expected to raise up to C$200m.
The IPO has been launched alongside a share buyback offer, worth C$50m, which enables some 2,000 Irish investors to exit at the same valuation as the stock market launch price.
Last week at the annual general meeting, IPL's chief executive, Alan Walsh, confirmed there was little appetite among investors for this option as long-suffering shareholders opt to cling on and await the anticipated gains from this latest renewal phase.
Over the past decade the company has swung from peaks to troughs, and at one point threatened to buckle under the weight of its debts as its shares, which trade in a grey market in Dublin, plunged to a low of 15c.
The much-anticipated float marks a watershed moment for the former sprawling buyout firm, once known as One51.
Under the terms of the deal, Irish investors will receive one common B class share for every five ordinary shares held.
The valuation of these shares has been set at C$2.70-C$3.20.
If the final offer price falls below the floor, the buyback agreements will be terminated.
The IPO valuation is understood to be weaker than IPL targeted a month ago amid a wider share price slump in the sector.
The group is now dominated by two major Canadian pension funds.
Recent weak performance from IPL's peers, London-listed RPC and US-listed Berry, has prompted a downward revision to its IPO range.
IPL also remains in the grip of a profit margin squeeze,
IPL is expected to debut on Toronto's stock exchange in the second half of June.
Irish investors, largely made up of co-ops, dairy farmers and high-net-worth individuals, are restricted from trading their shares in Canada for six months.