Wednesday 22 May 2019

IPL Plastics IPO comes in at lower end of price range

Chief executive Alan Walsh
Chief executive Alan Walsh

Gavin McLoughlin and Scott Deveau

IPL Plastics, the company formerly known as One51, has raised CAD$178m (€115m) in its flotation on the Canadian stock market.

The offering was oversubscribed but came in at the bottom of the company's price range. Recent falls in the value of peer companies RPC and Berry have weighed on the long-awaited IPO.

The sum raised includes the money used to pay off shareholders who were given the option to be bought out of the company on foot of the deal.

IPL chose to list in Canada in the hope that it would get a higher valuation in that market. The company will continue to be based in Dublin.

It's a landmark moment for the former One51 which abandoned a planned IPO a number of years ago. Having had operations in a multitude of sectors in its history, it is now focused on plastics manufacturing.

In 2015 it joined forced with a number of Canadian businesses to acquire Canadian plastics business IPL.

Since then it has shed a number of metals recycling businesses and renamed itself IPL Plastics.

The flotation will provide increased liquidity for shareholders. Up to now the shares have been trading on a so-called grey market, meaning they traded privately without being listed on a stock exchange. The bulk of the company's presence is now in North America. Speaking last month chief executive Alan Walsh said it had been looking at a number of acquisition opportunities in Europe.

He said a number of potential targets had been identified which would give the business "a meaningful presence in Europe".

In its IPO prospectus the company said it has been hit in recent times by increased input costs, in particular a rise in the price of resin.

It said it expected to feel a boost from passing this on to customers in the second and third quarters of this year.

The company has also seen its margins hit by increased transport costs in the North American market.

But it said it continues to experience strong demand, particularly in North America. (Additional reporting Bloomberg)

Irish Independent

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