Private Equity Co. to Buy Industrial Film Mfg. for US$2.6B

Shares of Intertape Polymer Group Inc. traded 76% higher after the company reported it agreed to be acquired by Clearlake Capital Group L.P. for CA$40.50 per share in cash.

Montreal-based industrial paper and film packaging manufacturing company Intertape Polymer Group Inc. (ITPOF:OTC; ITP:TSX) (IPG), today announced that it entered into a definitive agreement to be acquired by Clearlake Capital Group L.P. affiliate in all-cash transaction for CA$40.50 per share, which is equal to approximately US$2.6 billion including net debt.

The firm noted that the CA$40.50 per share offering price represents an 82% premium over IPG’s previous day’s closing share price and is about 66% above the company’s preceding 30-day volume weighted average share price.

Intertape Polymer Group’s President and CEO Greg Yull commented, “We believe this transaction is a great next step in the evolution of our business as Clearlake has strong industry knowledge in the protective packaging and e-commerce ecosystems. Clearlake provides us the operational and financial resources to accelerate our acquisition strategy, as well as organic growth opportunities such as investing in product innovation, sustainability, and market expansion…We have built a scaled business serving a diverse set of growing end markets, and have seen particularly strong growth in our large e-commerce segment. Clearlake’s investment reflects its confidence in our people, processes, and strategy, and this transaction will advance our vision of becoming a global leader in packaging and protective solutions. We believe this all-cash transaction represents an attractive return and provides certainty for our shareholder base.”

The company’s Board Chair James Pantelidis remarked, “IPG has succeeded over the decades through hard work, innovation, and a commitment to all of our stakeholders…Our Board determined that this transaction is in the best interests of both the company and shareholders after carefully evaluating its alternatives, as it will deliver immediate liquidity and maximize value to our shareholders while providing the company with additional flexibility to operate as a private company.”

In a joint statement, Clearlake Capital Group’s Co-Founder and Managing Partner José E. Feliciano and Managing Director Arta Tabaee stated, “We have a long-standing respect and admiration for Greg and his team as they have built on IPG ‘s position as a key packaging and protective solutions provider to a diverse set of attractive and growing end-markets…We believe IPG’s customer-centric and sustainability- oriented approach and capabilities position the company well to capitalize on growth within its target end markets, and the addition of IPG to our portfolio highlights our thesis that long-term consumer trends favor providers focused on sustainability and innovation. We look forward to partnering with the IPG team to leverage our O.P.S.® value creation framework and continue driving growth for this exciting platform, both organically and through acquisitions.”

The firm stated that after reviewing the proposed agreement terms, its Board of Directors has unanimously determined that the transaction is in the best interests of IPG and its shareholders. The company advised that the transaction is expected to close in Q3/22 but remains subject to receipt of a court-approved plan of arrangement, ordinary closing conditions, IPG shareholder and regulatory and court approvals.

The company advised that after the sale is finalized, IPG will become a privately owned company.

IPG stated that it will report financial results for Q4/21 and FY/21 on Friday, March 11, 2022, as previously planned but in light of entering into the buyout agreement with Clearlake it will not hold its usual conference call to discuss the results in detail.

IPG is headquartered in Montreal and is engaged in developing and manufacturing “a variety of paper and film-based pressure-sensitive and water-activated tapes, stretch and shrink films, protective packaging, woven and non-woven products and packaging machinery for industrial and retail use.” The firm employs around 4,100 people and has a total 29 manufacturing facilities in North America, Asia and Europe.

Clearlake Capital Group L.P. is a US-based private equity firm that invests in and provides credit and other related services mostly to companies in the industrials consumer, and technology sectors. The firm stated that it has a sector-focused approach and aims to establish long-term partnership with management teams and dynamic businesses. Clearlake has offices in Dallas, Tex. and Santa Monica, Calif. and currently has about US$$60 billion of assets under management.

IPG started the day with a market cap of around US$1.3 billion with approximately 59.28 million shares outstanding. ITPOF shares opened 76% higher today at US$30.4421 (+US$13.2007, +76.39%) over yesterday’s US$17.2802 closing price and reached a new 52-week high price this morning of US$30.6599. The stock has traded today between US$30.423 and US$30.6481 per share and closed for trading at US$30.4618 (+US$13.1748, +76.21%).

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