Irish environmental and injection molding company One51 plc is acquiring a like-minded firm to expand its footprint in North America.
One51 announced Nov. 4 that it bought Encore Industries Inc. of Sandusky, Ohio. The Dublin-based business paid $35 million for Encore, a company with forecast pro forma sales of $53.8 million in 2016. One51 estimates Encore's earnings before interest, tax, depreciation and amortization at $5.8 million this year, making the purchase price a multiple of six times EBITDA.
Coincident with the purchase, One51 said its IPL Inc. subsidiary will spend C$36 million (US$27 million) to expand its production capacity in Canada and in the United States. One51 made the Encore purchase through IPL.
Encore injection molds and thermoforms containers, paint trays, mixing containers and industrial pails for a variety of markets. Encore's production locations are in Cambridge, Ohio; Forsyth, Ga.; and Remer, Minn.
Encore uses regrind to mold its EcoSmart product line and uses a lot of regrind for its industrial pails. Other environmental initiatives include its solar- and wind-generated electricity projects and support for local recycling drives.
IPL is headquartered in St. Damien, Quebec, with manufacturing operations there and in Edmundston, New Brunswick, and Lee's Summit, Mo. It molds a wide variety of products for packaging, materials handling and environmental markets. IPL's products include wheeled waste and recycling carts.
In addition to its plastics operations, One51 has a hazardous waste management and recycling division and investments in renewable energy such as wind turbines. It runs several plastics operations in the United Kingdom, one in Ireland and one in China.
IPL, acquired by One51 in mid-2015, brought One51 into the rigid packaging market, and the Encore purchase extends its commitment to the sector. One51 owns 67 percent of IPL with the rest held by two Quebec investment funds.
“The acquisition of Encore together with the [IPL] capital investment program represents a significant step forward in One51's continued growth in the global plastic packaging market,” noted One51 CEO Alan Walsh in a news release.
One51 said the Encore deal brings a high quality and complementary customer base with cross-selling opportunities for IPL and Encore. The two plastics businesses will have more opportunity for new product development and synergies in resin procurement.
When One51 bought IPL in 2015, it estimated the Canadian company's sales for 2015 would come in at C$240 million (US$180 million). One51's own plastics sales were running at about US$165 million in 2015. When combined with the sales of IPL and Encore, One51 manages a US$400 million-plus plastics conglomerate.
One51 logged total sales of 214.2 million euros (US$237.8 million) for the six months ended June 30. Its net profit for the half year were 8.92 million euros (US$9.9 million). Two days before the Encore purchase announcement, One51 said it sold its metals recycling businesses in Ireland.
Encore's origins date to 1977. It was owned by the Rathbun family since that time. IPL also was a family business for many years, under the leadership of the Metivier lineage until Novacap Investments bought a majority of shares in 2010.