Intertape Polymer Group (ITP) is a company that makes packaging products like plastic films and tape and is headquartered in Montreal, Quebec and Sarasota/Bradenton, Florida. With over 2,000 employees and 2006 annual revenues of over $800 million, the company has a market cap of just $127 million and is currently selling at 0.17 times 2006 sales. This low valuation stems from the fact that the company is unprofitable and at the same time has a large debt burden of $310.73 million, giving it a debt to equity ratio of 1.096.
A couple of interesting events have transpired at Intertape over the last few months. The company received a buyout offer (pdf) at $4.76 per share in May from private equity firm Littlejohn, which represented a tiny premium of 5.5% over the average trading price of the last 30 trading sessions before the announcement. Over 70% of the company’s shareholders rejected this bid in late June and the stock took a deep dive. One of the reasons for this downward pressure is that a portion of the company’s long-term debt is due in 2009 and the company does not have enough liquidity to pay this debt.