RE:Takeover ??? With all that in mind, is IBC now vulnerable to a takeover? Possibly, says Dutton, although it’s unlikely Materion would be allowed to bid, due to US anti-trust laws. But there are other players, like the US company Precision Cast Parts.
If a bid were to come in, it would have to have certain conditions, but it would also offer certain benefits. IBC needs at least one more client to add to Lockheed, in order to attain critical mass. Having said that it doesn’t, at the current time, have the balance sheet to support rapid growth, which would principally involve the construction of new furnaces.
So a potential acquirer would need to be able to inject cash to support a scaling up of operations. At the same time, it almost goes without saying that it would need to keep the key IBC people on side. The new beryllium casting process hasn’t actually been patented, because, explains Dutton, the technology in patents can be tweaked. Keeping the know-how in-house will allow IBC to retain its edge. It also means that the people are crucial.
Whether a takeover bid does come in remains to be seen. But Dutton got plenty of experience in capital markets, and he’s got friends in London too, as well as Canada, where the equity markets have been very weak of late, so he’s confident of finding funds for expansion somehow.
“A year ago we didn’t have a contract”, he says. “Now we have a contract from Lockheed. That’s pretty much the same as a contract from the US government. Banks will be more willing to lend.”