One51 buys US plastics company in €32m deal

One51 buys US plastics company in €32m deal

One51, the environmental and plastics group spun out of IAWS, has acquired a second plastics business based in North America called Encore Industries for $35m (€32m). The acquisition was made through One51’s Canadian subsidiary IPL.

Encore is a producer of rigid plastic packaging products for the North American market, with manufacturing facilities situated in Ohio, Georgia and Minnesota. Encore is forecast to report turnover of $53.8m (€48.5m) and earnings (EBITDA) of $5.8m (€5.2m) for its 2016 financial year, giving the group a very healthy earnings margin of 10.8%.

The deal, which values Encore at six times earnings, will be funded through a combination of IPL’s existing cash resources and debt.

Additionally, One51 has announced a €24m capital investment programme for its IPL subsidiary that will see the expansion of IPL’s production capacity in both Canada and the US.

The group is eyeing growing consumer demand for the plastics products it manufactures, as well as tapping into new market segments in the large US market.

One51 chief executive Alan Walsh described the acquisition as a “significant step forward” in One51’s expansion in the global packaging market. The group’s first major step into this market came in July 2015 when One51 acquired a 67% controlling stake in the Canadian company IPL for more than €200m.

The deal was transformative for One51, effectively doubling the group’s turnover to the region of €450m per annum. Closer to home, One51 recently invested €8m in a new facility at Little Island in Cork that will supply plastic packaging to the Irish food sector.