ICI options a $2M purchase of plastics innovator
Innovative Composites International has an option to purchase a manufacturer of fibre-reinforced thermoplastic skin for $2 million, which would secure supply of the material and reduce raw materials costs.
TORONTO: Innovative Composites International (ICI) Inc. has an option to purchase a manufacturer of fibre-reinforced thermoplastic skin for $2 million and three years of royalties, which would secure supply of the material and reduce raw materials costs.
Eleison Composites LLC, based in Grandeville, Mich. with a production plant in Jasper, Ga., is a current ICI supplier.
ICI, a Toronto-based advanced materials innovator and manufacturer, said the integration of Eleison equipment would result in a significant reduction in the material cost of its products. The company also holds six patents and is on pace to generate revenue of approximately US$2 million in 2011 (net of sales to ICI).
“This transaction is the first step in ICI’s vertical integration strategy and would only close subject to ICI securing a major housing contract in the near future,” said the company in a statement.
The option agreement gives ICI exclusive rights to acquire substantially all of the Eleison assets including inventory, equipment, customer lists and purchase orders, patents and any other intellectual property, for a period of 120 days. Purchase price is $2 million plus a $1 million product royalty payable over a maximum of three years after the acquisition.
The acquisition allows ICI to control the supply of a strategic raw material that’s currently subject to lengthy lead times. In addition, Eleison’s patents allow for the use of recycled polyethylene terephthalate (PET) in the manufacture of thermoplastic skin and other core materials. ICI notes in the US about one million tons of PET water and soft drink bottles end up in landfills annually, potentially making it a readily accessible, no cost raw material for ICI products.
ICI is focused on two areas: Structure LiteTM panels, application-ready structural composite panels and Hero 451TM, an environmentally friendly fire inhibitor and suppressant.