It is understood that the owners of Mannok, formerly Quinn Industrial Group, are considering selling some or all of their stake in the company as they seek financiers for a proposed €200 million investment to meet the ‘Net- to achieve zero”.
The building products and packaging company has hired investment bank Evercore to review its funding options and it is understood one or more of the founding investors may be looking to exit.
The process of securing the new investment will likely result in a change in shareholders and could ultimately result in the sale of the entire company.
While Mannok is not immediately on the selling block, Contrarian, Silverpoint and Brigade Capital, owners since 2014, do not consider themselves long-term shareholders and are believed to be evaluating options to sell.
The company said Thursday it needed at least $200 million.
The Cavan-based company plans to inject the money into its local facilities to become a “decarbonization enabler” after its margins were squeezed by cost inflation and energy price hikes in late 2021.
“Mannok’s board of directors has approved this strategy and advisors have been appointed to assess how best to fund this investment while ensuring a capital structure that can accommodate changes in the group’s shareholder base over time,” said Chief Financial Officer Dara O’Reilly.
Since 2014, the company has spent €78.5 million on equity investments, so the project is of significant scale and will likely require a well-pocketed financier.
The investment plan is expected to begin with a €20 million decarbonization of the company’s vehicle fleet by 2024 and continue with the on-site installation of solar and wind power to generate energy for Mannok’s facilities.
Mannok increased revenues by 16 percent to 269.9 million euros in 2021, but profits fell from 31.1 million euros to 25.8 million euros, mainly due to cost absorption as energy, emission allowances and raw material prices rose began to rise.
Both Covid and Brexit have had a negative impact on the company’s building products business, but the business has received a boost from the packaging side due to changing consumer habits during the pandemic for takeaway and online shopping.
Owner trio Contrarian, Silverpoint and Brigade began their relationship with Mannok as a lender to what was then the Quinn Group, which emerged from a turbulent period following founder Seán Quinn’s ouster as owner in 2011.
Mannok was rebranded in 2020 after a five-year repositioning of the company under CEO Liam McCaffrey.
The company remains plagued by security issues stemming from a series of attacks on property and personnel, most notably the 2019 kidnapping and assault on Chief Operating Officer Kevin Lunney. Mr McCaffrey also reached an undisclosed settlement with of the Central Bank in relation to transactions conducted by Quinn Insurance.
