An affiliate of private equity firm Riverside Co. is preparing to buy expanded polystyrene products maker PFB Corp. for a total of C$178 million (US$142.7 million).
That is a premium of 7 percent over PFB's Nov. 4 closing price of C$24.10 (US$19.33) per share on the Toronto Stock Exchange.
The deal, which is subject to court and shareholder approval, is expected to close Dec. 17, PFB said in a news release. PFB directors have unanimously approved the agreement, under which Robert Graham will remain CEO.
After the announcement, Calgary-based PFB's shares rose 18.5 percent overnight to reach C$26.80 on Nov. 5.
In addition to a base purchase price of C$160 million, the board approved a C$2 per-share cash dividend to be paid Nov. 30. That's in addition to a special dividend of C$1 per share and the regular dividend of C$0.11 per share previously announced Oct. 22.
C. Alan Smith, PFB's executive chairman, said in a news release that Riverside will provide long-term investment support and the opportunity to grow across North America.
PFB has two subsidiaries: Plasti-Fab Ltd. in Calgary and PFB America Corp. in Meridian, Idaho. The company is vertically integrated, with its Canadian operations primarily making resin that its U.S. plants use to manufacture EPS panels and other insulating products for residential building and civil infrastructure applications. The U.S. operation also make customized log and timber structures, which it designs and installs.
PFB reported record consolidated sales in 2020 of almost C$134.8 million, up 1.2 percent from the year before. Profit rose to C$16.4 million, up from about C$9.03 million in 2019. The company attributed the performance to lower raw material costs, improved efficiency and strong demand.
Riverside Co., based in Cleveland, was founded in 1988. It mainly acquires companies valued at as much as $400 million. Riverside's private equity and structured capital portfolios include more than 130 companies, including injection molder Xcentric Mold & Engineering Inc. of Clinton Township, Mich.