Two investment firms are combining to buy Saint-Damien-based injection molder and extruder IPL Inc. for C$6.50 (US$6.29) per share, a deal that values the company at C$94.2 million (US$91.1 million).
The companies announced the merger agreement Sept. 7. It follows a 10-month review that IPL had announced Dec. 10.
The buyers are Novacap Investments Inc. of Longueuil, Quebec, and Fonds de solidarité FTQ of Montreal.
According to a Sept. 7 news release, brothers Clément, Rémi and Julien Métivier, along with senior management holding about 67 percent of IPL shares, have agreed to the acquisition. IPL's board also has approved the deal.
Novacap manages assets worth about C$750 million (US$725.8 million). Fonds de solidarité is a union-sponsored investment fund with assets of about C$7.3 billion (US$7.1 billion)
Ernst & Young Orenda Corporate Finance Inc. is serving as financial adviser to IPL.
IPL employs about 900 at its plants in Saint-Damien, Saint-Lazare and Lawrenceville, Quebec, and Edmundston, New Brunswick. The company serves the packaging, materials-handling and environment sectors and performs custom molding.
According to a recent investor note, the company posted fiscal third-quarter profit of C$1.1 million (US$1.1 million) on sales of C$47.7 million (US$46.2 million), compared with profit of C$1.9 million (US$1.8 million) on C$50.9 million (US$49.2 million) in sales for the year-ago period.
For the third quarter, IPL reported earnings before interest, taxes, debt and amortization of C$4.9 million (US $4.7 million) in 2010 vs. C$6.8 million (US$6.6 million) in 2009.
Sales in the U.S. were C$22.6 million (US$21.9 million), or 47.3 percent of the company's sales, in the third quarter of fiscal 2010, compared with C$19.2 million (US$18.6 million), or 37.7 percent of sales, in the year-ago period.