One51 plotting $1bn Canadian listing for second half of 2018
Plastics company eyeing acquisitions ahead of Toronto stock market flotation
Irish plastics company One51 is targeting a listing on the Toronto stock exchange as early as next year, which will put a valuation of over CAD$1bn (€663m) on the company.
The company had ebitda (earnings before interest, taxes, depreciation, and amortisation) of €55m in 2016 and has ambitions to grow that to €100m within the next two years, possibly through one to two acquisitions, which will make it sizeable entity upon flotation.
It is understood that the company will embark on a number of steps over the next 12 to 18 months to prepare for a Canadian listing, which will begin with a merger of its subsidiary IPL in Canada and its plastics business OPG in Ireland and the UK. This is expected to coincide with a refinancing of the entire business, according to market sources.
One51 will have to buy out the 33pc stake in IPL which it does not already own. In tandem with this, IPL's two Canadian shareholders CDPQ and FTQ will 'swap out' of the Canadian business and take a shareholding in the main One51 business.
Earlier this month, CDPQ, which owns 22pc of IPL, bought the 23pc stake in One51 previously owned by billionaire businessman Dermot Desmond. After the swap out, the Canadian shareholders will own close to 40pc of One51, it is understood.
A deal announced earlier this month - the US$150m (€134m) acquisition of US rigid plastics business Macro - will add at least €16m in ebidta to One51 next year. That would bring ebitda to close to €75m.
Multiples for businesses in this sector are between seven and 10 times ebitda. The listing would be expected to raise around €100m to fund further investment and acquisitions.
One51 is expected to push ahead with its strategy of further bolt-on acquisitions to its Canadian business IPL, which now accounts for 70pc of One51's business. However, under the current structure, One51 cannot access IPL's profits, which are ring-fenced within that business.
The merger would overcome that issue and allow greater synergies to be developed between the North American operations and OPG in Ireland and the UK, further improving margins.
A plan to float One51 last year was abandoned after a number of shareholders, including businessman Desmond, did not lend their support to the scheme. The company, which is focused on rigid plastics, has grown significantly since then.
Sunday Indo Business