Montreal packaging company signs acquisition agreement with private equity firm

Montreal, Que.-based specialized polyolefin plastic packaging producer Intertape Polymer Group Inc. has entered into an agreement to be acquired by Greenwich, Conn.-based private equity firm Littlejohn & Co., LLC at a price of US$4.76 per share. The total transaction is valued at approximately US$500 million.

According to Intertape’s board chairman Michael Richards, the company’s Board of Directors initiated a review of strategic alternatives in October 2006 in order to enhance value for the company’s shareholders.

“During the course of this review, the board, with the assistance of TD Sercurities, evaluated a comprehensive range of value maximization alternatives for the company in the context of its existing capital structure and current operating environment,” said Richards. “These alternatives included the sale of the company, raising additional equity, and the sale of one or more of the companys businesses to provide greater financial flexibility.”

Intertape previously posted a net loss of US$166.7 million for 2006, compared to net earnings of US$27.8 in 2005. According to interim CEO H. Dale McSween, the company also closed its flexible intermediate bulk containers (FIBC) manufacturing facility in Piedras Negras, Mexico, in addition to its Brighton, Colorado and Cap-de-la-Madeleine, Que. plants last year.

“Intertape Polymer faced challenges at almost every level through 2006. Management has dealt and continued to deal with each issue proactively, to establish for improvement in 2007,” said Richards during the announcement of the year-end results. “The series of corporate and operational events which characterized the past year were unprecedented in Intertape’s history.” Cited contributors included poor market conditions, volatile raw material costs, and the retirement of the company’s founder and CEO.

The transaction is subject to the approval of two-thirds of the votes cast the company’s shareholders at a special meeting anticipated to take place in June 2007. The arrangement will also require approval by the Superior Court of Quebec in the District of Montreal.