Intertape Polymer Group Inc. plans to expand in pressure-sensitive tapes and shrink film by acquiring American Tape Corp.
Intertape of Montreal agreed to pay about US$45 million for American Tape and refinance the company's long-term debt of about US$70 million. American Tape's manufacturing plants are in Marysville, Mich., and Richmond, Ky. It is a subsidiary of STC Corp. of Secaucus, N.J. Intertape has nine production plants in North America and one in Europe.
Intertape President Melbourne Yull said in a Nov. 5 news release that the deal will boost his firm's sales to more than C$500 million (US$360 million) per year. Intertape reported sales of C$258.2 million (US$185.9 million) for the nine months ended Sept. 30.
Yull said American Tape's masking, filament, pressure-sensitive and specialty tapes will be new products for his firm. American Tape's customer base of more than 1,000 has little overlap with Intertape's, giving the company a large potential new customer list.
Yull also noted that the deal will cut costs by eliminating overhead, streamlining distribution assets and reducing manufacturing and raw material costs.
The Montreal Gazette reported STC is a South Korean company that has been losing money. The newspaper quoted Yull as saying STC, like other underperforming South Korean companies, has been under pressure from lenders to improve its balance sheet, which led to the planned American Tape sale.
The Gazette article claimed American Tape's Michigan plant is profitable, but the one in Kentucky has been losing money, giving American Tape a break-even position.
Yull and STC officials could not be reached for comment as of press time.