Irish send more than rock stars
Given that U2 has been touring Canada — with the final two shows slated for Monday and Tuesday in Toronto — it’s tempting to believe that rock stars form a major part of exports from Ireland.
In part that’s true. But away from the concert arenas much has been happening in the world of Irish mergers and acquisitions. The latest transaction, the third by an Irish group of a Canadian company this year, occurred at the end of last week. It’s part of a trend: according to the Ireland-Canada Chamber of Commerce, Canada receives almost 25 per cent of Ireland’s foreign direct investment abroad. The Chamber noted that Canada is home to some 70 Irish companies, 12 of which settled in 2012.
Now there are three more: last Friday Dublin-based One51 PLC agreed to acquire a majority stake in Montrealheadquartered IPL Inc. for $290 million. One51, together with three Quebec-partners — Caisse de dépôt, Fonds de solidarité FTQ and Investissement Québec – bought the company from Novacap, a private equity manager. One51 will have a 67-per-cent stake.
One51 described the purchase as “a transformational deal” not just in terms of scale but also in strategic fit.
“IPL gives us access to significant new markets for our existing products while also allowing us to bring a wide range of exciting new products, especially in food packaging and bulk containers, to our existing customers,” said the company with two operating businesses (environmental services and plastics) and a portfolio of renewable energy investments.
Of the $290-million purchase price, the equity portion came to $135 million (with One51 kicking in $90 million.) The sub-debt came from the three Quebec-based partners.
IPL, which generated $215.2 million in revenue and $30.0 million in EBITDA in 2014, employs 800 people at five plants in North America. The company, which manufactures injection-moulded plastics, has been around since 1939.
Prior to One51’s transaction, two other Canadian companies fell to the charm of the Irish. ❚In February, CRH PLC bought certain global assets from Lafarge SA and Holicom Ltd. That purchase, that made CRH the world’s thirdlargest building materials player, came with an enterprise value of 6.5 billion euros ($9 billion). CRH’s acquisition followed forced divestitures from the US$40-billion French-based Lafarge and Swiss-based Holicom merger announced in 2014.
CRH’s purchase of Holicom’s Canadian operations and associated assets also included the acquisition of six U.S. cement terminals. Holicom, which employs about 2,600 people in Canada in four locations, manufactures cement, aggregates and readymix concrete, and also provides construction services. The acquisition received Competition Bureau approval last month. ❚In May the former Canadianlisted Vicwest Inc. completed a plan of arrangement involving Irish-based Kingspan Group Ltd. Kingspan defines itself as “a global manufacturer and seller of building products, including insulated metal panels and other building envelope products, insulation boards and raised access floors. ❚In that deal, Kingspan bought Vicwest and, at the same time, agreed to sell Vicwest’s steel division (Westeel) to AG Growth International, a Canadian public company. (Accordingly Kingspan ended up with Vicwest’s building products division.) When it was announced last November, the Kingspan/ Vicwest deal was valued in enterprise terms at $350 million.
That deal was completed two months back after the Competition Bureau ruled that Kingspan was required to sell Vicwest’s manufacturing facility in Hamilton, Ont.