/ Corporate / Advanced Drainage Buys Canada’s Ideal Pipe

Advanced Drainage Buys Canada’s Ideal Pipe

Matt Ball on February 5, 2015 - in Corporate

Advanced Drainage Systems Inc. has hiked its stake in the Canadian plastic drainage pipe market by acquiring Ideal Pipe Inc., which makes high density polyethylene pipe and related accessories.

ADS of Hilliard, Ohio, paid C$56.8 million (US$44.3 million) for Ideal, about 7.3 times earnings before interest, taxes, depreciation and amortization for the past trailing 12 months. In that period Ideal logged sales of about C$43 million (US$33.5 million) and recorded EBITDA of C$7.8 million (US$6.1 million).

The deal with Thorndale, Ontario-based Ideal gives ADS five Canadian manufacturing locations, up from two prior to the acquisition. ADS now counts three pipe plants in Ontario, one in Manitoba and one in Quebec. ADS has thus extended its field sales and engineering staff in Canada, which will help it expand its products and technologies, including the Allied Products line, through Ideal’s sales and distribution network.

“Through the combination of our businesses, we will be able to pursue new and exciting opportunities in the Canadian market and offer our customers an unmatched breadth of water management products and solutions,” ADS Chairman and CEO Joe Chlapaty said in a Feb. 2 news release.

“This puts us in a stronger competitive position as compared to manufacturers of concrete, steel and PVC pipe,” Chlapaty said.

Ideal was founded in 1979 by Gerald W. Clarke. In addition to drainage pipe the firm also extrudes HDPE conduit pipe for utilities. Ideal’s markets include agriculture, highway, culverts and storm sewers, residential and recreational. It was previously known as Ideal Drain Tile Ltd.

ADS is a major in corrugated pipe with 58 production plants globally and 29 distribution centers. In North America it runs an estimated 51 plants and reported sales of $1.07 billion for the year ended March 31 2014, according to Plastics News’ latest survey of pipe, profile and tubing manufacturers. It was the second largest North American PPT extruder in the survey.

ADS is publicly traded, the company made an initial public stock offering on the New York Stock Exchange on July 25.

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