Irish co-ops and Larry Goodman set for €155m cash windfall

Irish co-ops such as Glanbia, Kerry, Lakeland and Dairygold, along with beef baron Larry Goodman, are set for a €155m cash windfall after IPL Plastics agreed a deal that will see the company sold in its entirety for almost €350m.

On Wednesday, IPL Plastics (formerly One51) announced it had struck a deal to sell its entire business to Chicago-based private equity group Madison Dearborn Partners for a cash price of C$10/share, which is a 50% premium on where IPL shares were trading this week. The deal is subject to shareholder approval and values IPL at just over €346m.

There are about 2,000 Irish shareholders in IPL, including farmers, a number of Irish co-ops and Larry Goodman. Between them, Irish shareholders own about 45% of the shares in IPL.

Kerry Co-op currently holds about 5% of the shares in IPL Plastics, meaning it is set for a €17m payout

Irish co-ops currently hold around 20% of the shares in the company meaning they are set for a cash payout of just under €70m if this deal goes ahead.

Kerry Co-op currently holds about 5% of the shares in IPL Plastics, meaning it is set for a €17m payout, while Dairygold and Lakeland are in line to receive €10.4m each as they both hold 3% of the shares in IPL. Larry Goodman is thought to hold around 5% of the shares in IPL Plastics and would therefore be in line for a €17m cash windfall as part of the deal.

“We have concluded that this transaction is in the best interests of IPL Plastics and fair to our shareholders. With a view to maximising shareholder value we conducted a thorough assessment of Madison Dearborn [Partners’s] (MDP) proposal, as well as other alternatives reasonably available to the company, including the status quo,” said chair of the special committee that negotiated the deal Rose Hynes.

“Following this comprehensive assessment and our extensive negotiations with MDP, we are pleased to have reached an agreement that provides immediate and fair value to shareholders and includes significant procedural safeguards that protect minority shareholders,” added Hynes.