Royal Group Technologies Ltd. will encourage a bidding process for the company by setting up a data room in a month or two.
The firm wants to create a level playing field among potential bidders for the extrusion giant, Robert Lamoureux, interim chief financial officer and lead director, told shareholders at Royal's annual meeting May 25 in Toronto. New York equity firm Cerberus Capital Management already has proposed a C$14 (US$11.07) per-share bid for the company and is conducting due diligence. Royal has not determined whether the Cerberus bid is in the best interest of the company and its shareholders, Lamoureux said.
Meanwhile Royal's investments continue, with its Royal Crown Ltd. business committing US$12.2 million to expand extrusion operations in Sparks, Nev., and Milford, Ind. The projects, to be completed by fall, include spending US$3.4 million to boost compounding capability at the unit's Milford headquarters. Both sites will split an $8.8 million infusion into profile extrusion, with four new extrusion lines in Sparks and four high-speed production lines and tooling in Milford, officials said.
The Sparks site will add 16 employees to its current base of 155, but has space to accommodate the new lines, said Peter Kotiadis, Royal's sales and marketing director for deck, fence and railing. At Milford, the plant will expand by 13,000 square feet and add 12 workers to its base of 135. Another 30,000 square feet will be built for external storage.
Several firms besides Cerberus have expressed interest in Woodbridge, Ontario-based Royal. In a news conference after the annual meeting, Lamoureux would not disclose whether any of those firms are Royal competitors.
Cerberus' offer would be worth about C$1.3 billion (US$1 billion). New York-based Cerberus has an agreement with Royal founder Vic De Zen, Domenic D'Amico and affiliates to tender their shares, representing about 19.9 percent of Royal's equity, under Cerberus' proposed offer.
Plastics News staff reporter Angie DeRosa contributed to this story.