September 20, 1999 CPI PLASTICS GROUP LTD. ACQUIRES EXTRUFIX INC. FOR $9.5 MILLION MISSISSAUGA, ONTARIO - CPI Plastics Group Ltd. (CPI) announced today it has acquired 100% of the shares of Extrufix Inc. (“Extrufix”), for $9.5 million cash from Oonagh McNerney (the founder of Extrufix and a controlling shareholder), and other members of the McNerney family. Extrufix has been engaged since 1970 in the manufacture, distribution and sale of Rack Sacks™, and several lines of plastic bags under the Extrufix name and other private label brand names. The Rack Sack™, which is used with plastic bag refills made by Extrufix or with plastic shopping bags, to collect kitchen garbage is sold in most grocery, hardware and mass merchandise stores including Canadian Tire, Safeway and Walmart in Canada and Publix, K-Mart and Home Depot in the U.S. The Extrufix line of plastic bags includes outdoor and indoor garbage bags, lunch bags, freezer and sandwich bags and cat pan liners. For the 10 month period ending July 31, 1999 Extrufix had consolidated sales and normalized profit before tax of $10.1 million and $1 million respectively based on total assets (book value) at July 31, 1999 of $5.3 million. On an annualized basis, CPI management believes that the Extrufix acquisition alone will increase CPI’s sales for the Year 2000 by 20% and earnings before interest, taxes and depreciation by 25%. The transaction was financed through a recently negotiated $27 million term and operating facility extended to CPI by its banker, the Toronto-Dominion Bank of which (i) $7 million was used to repay indebtedness owing to Penfund, (ii) $9.5 million was used to complete the Extrufix acquisition and the balance to fund internal growth at CPI and Extrufix. TMs. Susan McNerney the President of Extrufix stated that the acquisition will enable Extrufix to significantly expand its operations into the United States to meet the growing demand for its products. Ms. McNerney and Michael McNerney, the two senior members of the Extrufix management group have entered into five year employment arrangements and will continue to manage the Extrufix business within CPI. Peter Clark, CPI’s Chairman indicated that CPI has created a new division to be headed by Susan McNerney to develop consumer products utilizing CPI’s core competencies, including the revolutionary wood replacement product, Extrudawood, and those developed by Extrufix. “This is an exciting development for CPI and will provide a myriad of growth opportunities at higher-than average profit margins” quoted Peter Clark. CPI is a North American leader in designing, engineering and manufacturing thermoplastic extrusions. In addition to Extrudawood, CPI’s products also include decorative trim and functional parts for a variety of industries such as automotive and appliance manufacturers. CPI is based in Mississauga, Ontario and will now have six manufacturing plants in Ontario as well as distribution facilities in Elkhart, Indiana and Orlando, Florida. CPI employs more than 660 people. CPI Plastics Group Ltd. is listed on the Toronto Stock Exchange and trades under the symbol CPI. back to top