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Intasco acquired by Unique Fabricating

ABR Staff Writer Published 03 May 2016

Intasco, a Canadian manufacturer of precision die cut solutions has been acquired by Unique Fabricating, which manufactures multi-material foam, rubber, and plastic components.

Intasco provides cutting-edge and highly specialized adhesive products to the automotive and manufacturing industries, primarily in the United States and Canada.

The company is a leader in providing material conversion of pressure-sensitive products such as film, label stock and foams, as well as adhesives and automotive die cuts with a specialty in interior and exterior attachment systems.

Unique Fabricating CEO John Weinhardt said: "This strategic, highly synergistic and accretive acquisition significantly broadens our solution offerings, production capabilities, and expands our reach in our existing markets, as well as certain adjacent, markets.

"This acquisition is representative of our strategy to acquire profitable companies that add new markets, products and processes that enable us to recognize sales efficiencies and expand our scale.

The specialized processes and customized nature of Intasco's offerings provide an attractive, high-margin growth opportunity to augment our financial performance and further capitalize on the operating leverage inherent in our business model, which we believe, will enable meaningful, profitable expansion of our business and increased free cash flow."

Intasco generated approximately $17.8 million USD in revenues, with net income of approximately $2.6 million USD and EBITDA of approximately $3.6 million USD, based on unaudited financial results for the 12 month period ending January 31, 2016.

Weinhardt added: "Intasco is a leader in precision die cutting and double-sided attachment tapes.

"Through this transaction we are enhancing our position as a one-stop shop for many of our current customers and creating opportunities to expand the addressable market of the Intasco business.

"This combination provides us with a stronger geographic presence in Canada, additional opportunities to service key customers and it helps us strengthen our competitive position in the markets we serve."

In consideration for the acquisition, which closed on April 29, 2016, a newly formed subsidiary of the Company, Unique-Intasco Canada paid approximately $26.5 million CAD ($21.0 million USD) in cash at closing for the purchase of Intasco Corporation.

In addition, Unique Fabricating NA, Inc. (the "US Buyer"), an existing subsidiary of the Company, purchased 100% of the outstanding capital stock of Intasco USA for approximately $1 million CAD (approximately $790,000 USD) paid by the issuance of 70,797 shares of the Company's common stock, par value $0.001 per share.

The shares issued are "restricted shares" issued in reliance on an exemption from the registration requirements of the Securities Act of 1933, as amended. A portion of the purchase price is being held in escrow to fund the obligations of Intasco and a related party to indemnify the Canadian Buyer and US Buyer against certain claims, losses, and liabilities.

The purchase price of the total Acquisition is subject to adjustment based upon Intasco's working capital at closing.

To finance the acquisition, Unique refinanced its existing senior credit facility with Citizens Bank, including a $30 million revolving line of credit, a $17 million term loan to Unique NA, and a $15 million term loan to Unique-Intasco Canada, with Citizens serving as the syndication agent.

Source: Company Press Release