One51 close to €100m plastics acquisitions in US and Europe

Monday, Aug 29, 2016

One51 is closing on two significant acquisitions to bolster its plastics business, the Sunday Independent has learned.

The company hopes to be able to announce the deals within three months, a source with knowledge of the situation said.

The source said one target is in the United States, with the other in Europe. The combined cost of the deals will be around €100m, on an enterprise value basis (including the target companies' debt as well as their shares), and will be funded via banking facilities, the source said.

One51 has been on the hunt for deals after deciding not to proceed with a planned IPO. Talks with large stakeholders prompted management to abort the plan in the belief that it would not receive enough backing from shareholders to go ahead. Financier Dermot Desmond is understood to have been among the shareholders opposed to the IPO plan.

One51 chairman Denis Cregan told a shareholder meeting earlier this year that some shareholders believed the best way to grow the business was via debt financing, rather than raising fresh equity.

The company - which aside from its plastics arm also has an environmental services business - more than doubled its earnings before interest, depreciation, tax and amortisation (EBITDA) year-on-year in the first half, to €27.1m, according to results published on Friday. The growth was fuelled by its purchase of a majority stake in Canadian plastics business IPL.

Group chief executive Alan Walsh said integration of IPL has been completed, and that it had performed ahead of expectations since it was acquired.

"The second half of the year has started satisfactorily across all divisions with a number of significant capital investment projects undertaken in the first half of the year now coming into production," Walsh said.

"UK earnings were adversely affected by the fall in the value of sterling in the wake of Brexit. Other potential impacts of Brexit are difficult to assess currently, but should become clearer in the second half of the year," he added.

In reporting the results, One51 said it "has available to it a number of significant and exciting organic and acquisitive-led growth opportunities".

"In evaluating these opportunities, the Group will seek to continue to allocate its available capital resources to those activities which provide the best opportunity for the highest return."


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