An Athlone company has announced that it will float on the Dublin and London stock exchanges in a move which the company says will value it at £45-£50 million. The company, Athlone Extrusions, is a leading producer of thermoplastic sheet and film. It sells its products to companies which use them to manufacture products such as sanitary ware, furniture facings and housings for computers and telephones.
The flotation, if successful, will make the company's managing director Mr Jimmy McGee, who holds a 10 per cent stake, a multimillionaire. The family interests of the late managing director, Pat Ryan, could reap up to £15 million. A number of institutions, including investors assembled by Riada at the time of the management buyout, (who are said to hold 20 per cent of the company) will also benefit. Institutional shareholders include New Ireland and Irish Life. Senior management hold another 10 per cent of the company and employees are understood to hold 5-6 per cent through a profit-sharing scheme.
Mr McGee conceded yesterday that the timing of the announcement - given the turmoil on the world stock markets - was not ideal. However, he explained that the company had circulated notice of its e.g.m. to approve the flotation last Thursday.
It was inevitable that details would leak out to the media and it was felt it would be better to issue a formal announcement on the matter.
The company intends to float in late November or early December. It will seek a simultaneous listing in Dublin and London.
Mr Pat Landy, of NCB Stockbrokers, who are sponsoring the listing said last night that it was hoped the market would right itself in the coming weeks. He said the company was extremely strong with a good position in its product market. "It also has a very strong, experienced industry management team," he said.
Mr McGee stressed that the company was only announcing its intention to float. Around 50 shareholders were notified of the company's e.g.m., which will be held on November 19th. "The shareholders will decide at that time," he said.
Mr McGee said Athlone was very confident that what had happened in the markets would not affect the company. The company's core business is the conversion of polystyrene and ABS granules into coloured sheet and film. Its products are sold on to firms which mould the sheets into items for refrigerator linings, kitchen and bedroom furniture facings as well as other products. Mr McGee said the flotation was being undertaken to help the company expand. He said the company aimed to grow organically, but would also be on the look-out for acquisitions.
The subject of a management buyout in 1990, Athlone Extrusions has grown rapidly over the past seven years. In the year to September 30th last, its turnover grew by 6 per cent to £21.9 million. Its pre-tax profit was £2.9 million. Profit after tax last year was £2.6 million according to the company.
Turnover has grown 46 per cent over the period 1992-1996.
The company employs 153 people and three years ago opened a sales office to service the European market. Mr McGee said, although the British market is extremely important, its business in Europe has grown substantially.
The company sells to 400 customers in 22 countries. However, almost 70 per cent of its sales are to the British market. Only 6.4 per cent of sales are to Ireland.
The company was originally founded in 1971. The company said that no single customer accounted for more than 5 per cent of total sales and its five largest customers account for only 18 per cent of total sales.
