The Ontario Teachers' Pension Fund has learned a lot about plastics in the last few years.
The fund in May bought septic tank maker Infiltrator Systems Integrated LLC for $530 million from private equity firm Graham Partners Inc. Infiltrator is based in Saybrook, Conn., and posted sales of $190 million in 2014, making tanks and leach field products for single-family and commercial construction markets.
The Infiltrator purchase was the third plastics-related deal in three years for OTPP, which manages more than $150 billion in assets for 311,000 active and retired teachers in Ontario. In August 2013, OTPP joined with Ares Fund Management LLC to buy CPG International Inc. Scranton, Pa.-based CPG makes wood-plastic decking under the Azek Building Products and TimberTech trade names.
No purchase price was disclosed in the deal between OTPP, Ares and CPG owner AEA Investors LP, a New York private equity firm. Market speculation on the deal priced it at between $1 billion and $1.5 billion. The company was renamed Infiltrator Water Technologies after the sale.
In a recent email, OTPP communications and media relations vice president Deborah Allan said that the rebound in the U.S. housing industry and growing building product demand “were the primary factors” in the fund's decisions to enter into the Infiltrator and CPG deals.
Earlier in 2013, the fund bought fishing and outdoor equipment maker Plano Molding Inc. of Plano, Ill. Plano has its own in-house injection molding for fishing tackle boxes, tool boxes and carrying cases. OTPP bought Plano for an undisclosed price from financial group Tinicum Capital Partners.
At the time the deal was completed, Jane Rowe, OTPP senior vice president, said in a news release that Plano “has exceptionally strong brands and product categories, supported by attractive market characteristics.” In her email, Allen added that OTPP believes that Plano is well-positioned for growth.
For competitive reasons, Allan declined to comment on any future deal prospects for OTPP.
Several financial pros contacted by Plastics News said that OTPP essentially functions as a private equity fund in the way that it acquires businesses on behalf of its members.
Bill Ridenour, president of Polymer Transactions in Newbury, Ohio, said that it's somewhat unique for OTPP to make its investments directly instead of through another private equity fund, as some pension plans have been known to do.