Royal Group to buy Sarnia PVC facility
ÿTORONTO, March 31 (Reuters) - Toronto-area vinyl building producer
Royal Group Technologies Ltd. said on Tuesday it will buy Imperial Oil
Ltd.'s Sarnia, Ontario-based PVC resin facility in a deal valued at C$82
million.
ÿ Royal Group said the polyvinyl chloride plant, which has a production
capacity of 400 million pounds per year, will be used to supply a number
of resin grades for use in Royal's operations.
ÿ Royal produces vinyl building products, including vertical window
blinds, siding and pipe, as well as pre-engineered, modular buildings.
ÿ Gregory Misztela, a Toronto-based analyst at Griffiths McBurney
Partners, said the company will benefit from having its own resin
facility and technology, significantly reducing costs. The plant will be
used solely for Royal's production.
ÿ "It's not really surprising that these guys want to be more
integrated," Misztela said. "They've been growing extremely fast and one
of the major concerns was the availability of PVC. They are obviously
securing most of the needs for this."
ÿ "I view it as another step towards the full integration of this
company. Sooner or later we knew they had to expand into this area and
it's probably a good deal for them."
ÿ The acquisition, subject to regulatory approval, is expected to close
by June 1.
ÿ In mid-morning trading Royal's shares were up 0.30 to 46.50 on volume
of 10,540 shares on the Toronto Stock Exchange.
ÿ ($1 $1.42 Canadian) |
