Skip to main content
Complete Olympic Games coverage at your fingertips
Your inside track on the Olympic Games
Enjoy unlimited digital access
$1.99
per week for 24 weeks
Complete Olympic Games coverage at your fingertips
Your inside track onthe Olympics Games
$1.99
per week
for 24 weeks
// //

Private equity giant Apollo Global Management Inc. has agreed to acquire a 51-per-cent stake in ABC Technologies Holdings Inc. less than two months after its initial public offering.

Apollo will purchase $276.6-million of shares from ABC’s parent company Cerberus Capital Management LP, but made no offer to to buy shares from public shareholders, who will own approximately 20.9 per cent of outstanding shares when the deal closes. Shares of ABC have traded at low volumes. Nearly 80 per cent of the company’s outstanding shares are owned by insiders.

Founded in 1974, ABC specializes in creating thermoplastics for car manufacturers. The Toronto-based company slashed its original IPO size by 60 per cent from $255-million to $100-million, eventually entering the Toronto Stock Exchange at $10 a share on Feb. 22.

Story continues below advertisement

Apollo will purchase 27.7 million common shares of ABC at $10 a share, a 2.56-per-cent premium on the stock’s price at the open on Feb. 13, when the deal was announced. The acquisition price could increase to $10.64 a share if ABC makes any acquisitions prior to or within 12 months of the Apollo deal closing.

“ABC’s strong operational and financial performance, combined with its near-term opportunities as a platform for industry consolidation in the automotive technical plastics space, led to an unsolicited offer from the Apollo Funds to acquire a majority stake in the Company,” ABC president and chief executive Todd Sheppelman said in a press release.

“With its recent IPO, ABC is well-positioned to win market share and drive its leadership in the automotive plastics industry through organic growth and acquisition opportunities,” Cerberus senior managing director Dev Kapadia said in the release.

Apollo declined to comment further.

“Cerberus’s intentions for this transaction are apparent as it desires to monetize its ownership of ABC at the same price as the recent IPO,” BMO Capital Markets analyst Peter Sklar wrote in a research note. “While Apollo’s intentions remain unclear, clearly it sees value at $10 per share. As well, Apollo’s agreement to pay more if ABC were to complete one or more acquisitions leads us to believe that potential acquisitions are more likely to unfold.”

As part of the deal, Apollo will be entitled to nominate five of ABC’s nine board members. ABC will be able to nominate three.

ABC’s sales and earnings have been relatively flat since Cerberus bought it in 2016. ABC made US$65-million in fiscal 2019, which ended in June, 2019, but lost US$26.1-million during fiscal 2020 because of the economic effects of the COVID-19 pandemic.

Story continues below advertisement

The company’s IPO had tepid interest from investors when it was marketed between $12 and $15 a share. Companies such as Boat Rocker Media Inc. and MDA Ltd. have also had to cut their IPO size this year. Saskatoon-based Vendasta Technologies Inc. has also struggled to sell its $100-million IPO.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies