A Montreal investment firm plans to merge with blown film producer Imaflex Inc., also of Montreal.
Cyclonic Investments Corp. said it signed a letter of intent to buy Imaflex for Cyclonic shares worth about C$6.2 million (US$4.3 million). Imaflex had sales of C$8.6 million (US$6 million) and profit of C$380,000 (US$266,000) for the year ended Jan. 31.
Cyclonic President Pierre Myrand said his firm is attracted to Imaflex's growth potential and experienced management. Imaflex's sales grew more than 40 percent last year and it recently completed an expansion that should fuel additional increases, Myrand said in a telephone interview. Imaflex spent more than C$500,000 (US$350,000) on the expansion and in a move to a larger, 30,000-square-foot plant.
Myrand did not disclose Imaflex's capacity or other equipment details. The firm makes monolayer polyethylene films, mainly for food packaging. Although most of its sales have been in the province of Quebec, Imaflex's expansion will allow it to boost sales to other Canadian and U.S. markets, Myrand said. Imaflex officials were unavailable for comment.
Joseph Abbandonato, Imaflex president, will join the board of directors of the merged company. Myrand predicted the deal will be finalized within three months.
One condition of the merger is that Cyclonic raise C$648,000 (US$454,000) in a private placement of Cyclonic special warrants. Cyclonic trades on the Alberta Stock Exchange.