SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
INTERTAPE POLYMER GROUP INC.
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(Name of Issuer)
Common Stock, without nominal or par value
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(Title of Class of Securities)
460919103
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(CUSIP Number)
Daniel Khoshaba, Managing Member
KSA Capital Management, LLC
4 Essex Avenue, 4th Floor
Bernardsville, New Jersey 07924
Tel: +1 (908) 766-3331
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 15, 2008
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(Date of Event which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [ ].
CUSIP No. 460919103
---------------------
1. NAME OF REPORTING PERSONS
KSA Capital Management, LLC
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [_]
3. SEC USE ONLY
4. SOURCE OF FUNDS
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
2,989,781
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
2,989,781
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,989,781
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.07%
14. TYPE OF REPORTING PERSON
OO, IA
CUSIP No. 460919103
---------------------
1. NAME OF REPORTING PERSONS
Daniel Khoshaba
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [_]
3. SEC USE ONLY
4. SOURCE OF FUNDS
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
7. SOLE VOTING POWER
0
8. SHARED VOTING POWER
2,989,781
9. SOLE DISPOSITIVE POWER
0
10. SHARED DISPOSITIVE POWER
2,989,781
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,989,781
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.07%
14. TYPE OF REPORTING PERSON
IN, HC
CUSIP No. 460919103
---------------------
Item 1. Security and Issuer.
Intertape Polymer Group, Inc. Common Stock, without nominal or par value
per share (the "Shares")
9999 Cavendish Blvd., Suite 200
Ville St. Laurent, Quebec
Canada H4M 2X5
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Item 2. Identity and Background.
(a-c,f) This Schedule 13D is being filed by KSA Capital Management, LLC ("KSA
Capital Management"), and Daniel Khoshaba, the managing member of KSA Capital
Management, LLC. (Each of KSA Capital Management and Daniel Khoshaba may be
referred to herein as a "Reporting Person" and collectively may be referred to
as "Reporting Persons".)
KSA Capital Management is a Delaware limited partnership with its principal
business address at 4 Essex Avenue, 4th Floor, Bernardsville, New Jersey 07924.
Daniel Khoshaba is a United States citizen whose principal business address is
c/o KSA Capital Management, LLC, 4 Essex Avenue, 4th Floor, Bernardsville, New
Jersey 07924.
The Shares reported herein are held in the name of certain private investment
vehicles and a managed account by KSA Capital Management.
(d) None of the Reporting Persons have, during the last five years, been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) None of the Reporting Persons have, during the last five years, been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding were or are subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or state securities laws or finding
any violation with respect to such laws.
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Item 3. Source and Amount of Funds or Other Consideration.
As of the date hereof KSA Capital Management may be deemed to beneficially own
2,989,781 Shares.
As of the date hereof Daniel Khoshaba may be deemed to beneficially own
2,989,781 Shares.
No borrowed funds were used to purchase the Shares, other than any borrowed
funds used for working capital purposes in the ordinary course of business.
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Item 4. Purpose of Transaction.
The Reporting Persons have acquired their Shares of the Issuer for investment.
The Reporting Persons evaluate their investment in the Shares on a continual
basis. The Reporting Persons have no plans or proposals as of the date of this
filing which, other than as expressly set forth below, relate to, or would
result in, any of the actions enumerated in Item 4 of the instructions to
Schedule 13D.
The Reporting Persons expect to be in contact with the members of the Issuer's
management, the members of the Issuer's Board of Directors, other significant
shareholders and others regarding the near and long term management and
operation of the Issuer. The purpose of such discussions will be to communicate
with the Issuer's management regarding the investment objectives of the
Reporting Persons and to share with the Issuer's management such ideas as the
Reporting Persons may have regarding the maximization of stockholder value.
On December 30, 2008 the Reporting Persons mailed a letter to the Issuer
expressing their concern with the Issuer's current strategy and management and
setting forth immediate actions that the Reporting Persons believe should be
taken by the Issuer to maximize shareholder value. The Reporting Persons believe
the current strategy employed by the Issuer is deeply flawed and suggest that
the Issuer take the following immediate actions: (i) commence the process of
putting the Issuer up for sale or replace the Board of Directors and Executive
Director and restructure corporate governance and (ii) restructure management's
economic incentives, including compensation agreements established between the
Issuer and entities in which certain ITP directors have significant economic
interests, so that they are more aligned with the interests of all the Issuer's
shareholders. Such letter is attached hereto as Exhibit C.
The Reporting Persons intend to review their investment in the Issuer on a
continuing basis. Depending on various factors including, without limitation,
the Issuer's financial position, conditions in the industry sector in which the
Company operates and general economic and industry conditions, the Reporting
Persons may in the future take such actions with respect to their investment in
the Issuer as they deem appropriate including, without limitation, making
proposals to the Issuer concerning changes to the capitalization, ownership
structure or operations of the Issuer, selling some or all of the issuers
assets, or changing their intention with respect to any and all matters referred
to in this Item 4.
The Reporting Persons reserve the right to effect transactions that would change
the number of shares they may be deemed to beneficially own.
The Reporting Persons further reserve the right to act in concert with any other
shareholders of the Issuer, or other persons, for a common purpose should it
determine best to do so.
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Item 5. Interest in Securities of the Issuer.
(a, b)
As of the date hereof, KSA Capital Management may be deemed to be the beneficial
owner of 2,989,781 Shares, constituting 5.07% of the Shares of the Issuer, based
upon the 58,966,348 Shares outstanding as of March 31, 2008.
KSA Capital Management has the sole power to vote or direct the vote of 0
Shares; has the shared power to vote or direct the vote of 2,989,781 Shares; has
sole power to dispose or direct the disposition of 0 Shares; and has shared
power to dispose or direct the disposition of 2,989,781 Shares.
KSA Capital Management specifically disclaims beneficial ownership in the Shares
reported herein except to the extent of its pecuniary interest therein.
As of the date hereof, Daniel Khoshaba may be deemed to be the beneficial owner
of 2,989,781 Shares, constituting 5.07% of the Shares of the Issuer, based upon
the 58,966,348 Shares outstanding as of March 31, 2008.
Daniel Khoshaba has the sole power to vote or direct the vote of 0 Shares; has
the shared power to vote or direct the vote of 2,989,781 Shares; has sole power
to dispose or direct the disposition of 0 Shares; and has shared power to
dispose or direct the disposition of 2,989,781 Shares.
Daniel Khoshaba specifically disclaims beneficial ownership in the Shares
reported herein except to the extent of his pecuniary interest therein.
(c)
The trading dates, number of Shares purchased and sold and price per share for
all transactions in the Shares during the past 60 days by the Reporting Persons
are set forth in Exhibit B and all such transactions were effected in open
market transactions.
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Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
None.
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Item 7. Material to be Filed as Exhibits.
Exhibit A: Agreement between the Reporting Persons to file jointly
Exhibit B: Schedule of Transactions in the Shares of the Issuer
Exhibit C: Letter to the Issuer
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
KSA Capital Management, LLC
By:
By: Daniel Khoshaba, Managing Member
By: /s/ Daniel Khoshaba
/s/ Daniel Khoshaba
-------------------
Daniel Khoshaba
December 30, 2008
Attention. Intentional misstatements or omissions of fact constitute federal
criminal violations (see 18 U.S.C. 1001).
Exhibit A
AGREEMENT
The undersigned agree that this Schedule 13D dated December 30, 2008 relating to
the Common Stock, without nominal or par value per share of Intertape Polymer
Group, Inc. shall be filed on behalf of the undersigned.
KSA Capital Management, LLC
By: Daniel Khoshaba, Managing Member
By: /s/ Daniel Khoshaba
/s/ Daniel Khoshaba
--------------------
Daniel Khoshaba
December 30, 2008
Exhibit B
TRANSACTIONS IN THE SHARES
TRANSACTIONS BY KSA CAPITAL MANAGEMENT
Date of Number of Shares
Transaction Purchase/(Sold) Price of Shares
------------ ---------------- ---------------
2008/10/24 1000 1.70
2008/10/24 1000 1.78
2008/10/24 1000 1.66
2008/10/24 500 1.72
2008/10/24 1000 1.79
2008/10/24 1000 1.80
2008/10/24 1000 1.74
2008/10/24 1000 1.80
2008/10/24 1000 1.79
2008/10/24 1000 1.78
2008/10/24 1000 1.79
2008/10/24 1000 1.73
2008/10/24 300 1.73
2008/10/24 200 1.71
2008/10/24 1000 1.71
2008/10/24 900 1.65
2008/10/24 100 1.66
2008/10/24 1000 1.81
2008/10/24 1000 1.76
2008/10/24 1000 1.72
2008/10/27 1000 1.78
2008/10/27 1000 1.80
2008/10/27 1000 1.78
2008/10/27 1000 1.79
2008/10/27 1000 1.80
2008/10/28 1000 1.73
2008/10/28 1000 1.73
2008/10/28 6000 1.72
2008/10/28 1000 1.73
2008/10/28 1000 1.75
2008/10/28 6000 1.73
2008/10/28 1000 1.71
2008/10/28 1000 1.73
2008/10/28 1000 1.75
2008/10/28 1000 1.73
2008/10/28 2800 1.75
2008/10/28 1000 1.73
2008/10/28 1000 1.73
2008/10/28 1000 1.73
2008/10/28 1000 1.73
2008/10/28 1000 1.73
2008/10/28 1000 1.74
2008/10/28 4300 1.73
2008/10/28 1000 1.73
2008/10/28 1000 1.73
2008/10/28 6000 1.73
2008/10/28 100 1.74
2008/10/28 1000 1.73
2008/10/28 1000 1.73
2008/10/28 1000 1.74
2008/10/28 1000 1.72
2008/10/29 1000 1.69
2008/10/29 1000 1.69
2008/10/29 1000 1.71
2008/10/29 1000 1.70
2008/10/29 1000 1.70
2008/10/29 1000 1.72
2008/10/29 1000 1.73
2008/10/29 1000 1.68
2008/10/29 1000 1.67
2008/10/29 1000 1.67
2008/10/29 1000 1.67
2008/10/29 1000 1.67
2008/10/29 1000 1.70
2008/10/29 1000 1.67
2008/10/29 1000 1.70
2008/10/29 1000 1.70
2008/10/29 1000 1.67
2008/10/29 1000 1.67
2008/10/29 1000 1.69
2008/10/29 1000 1.65
2008/10/29 1000 1.74
2008/10/29 1000 1.69
2008/10/29 1000 1.67
2008/10/29 1000 1.70
2008/10/29 5000 1.69
2008/10/29 1000 1.67
2008/10/29 1000 1.67
2008/10/29 100 1.71
2008/10/29 1000 1.70
2008/10/29 1000 1.70
2008/10/29 1000 1.69
2008/10/29 1000 1.67
2008/10/29 1000 1.70
2008/10/29 1000 1.67
2008/10/29 1000 1.70
2008/10/29 1000 1.69
2008/10/29 1000 1.67
2008/10/29 1000 1.67
2008/10/29 1000 1.71
2008/10/31 5000 1.87
2008/10/31 2500 1.79
2008/10/31 5000 2.06
2008/10/31 1500 1.85
2008/10/31 2500 1.73
2008/10/31 5000 1.76
2008/10/31 10000 2.27
2008/10/31 2500 2.17
2008/10/31 5000 1.88
2008/10/31 1000 1.75
2008/10/31 10000 2.14
2008/10/31 2500 2.20
2008/10/31 1400 2.24
2008/10/31 2500 1.85
2008/10/31 5000 2.13
2008/10/31 5000 1.79
2008/10/31 2500 2.20
2008/10/31 5000 2.07
2008/10/31 100 1.88
2008/10/31 10000 1.99
2008/10/31 1500 1.84
2008/10/31 1500 1.87
2008/10/31 2500 1.88
2008/10/31 3000 1.88
2008/10/31 2500 1.88
2008/10/31 3500 1.88
2008/10/31 2500 1.75
2008/10/31 1500 1.82
2008/11/03 1000 1.90
2008/11/03 1000 1.92
2008/11/03 1000 1.91
2008/11/03 1000 1.90
2008/11/03 1000 1.90
2008/11/03 1000 1.91
2008/11/03 1000 1.92
2008/11/03 1000 1.90
2008/11/03 1000 1.91
2008/11/03 1000 1.91
2008/11/03 1000 1.90
2008/11/03 1000 1.92
2008/11/03 1000 1.93
2008/11/03 1000 1.94
2008/11/03 1000 1.90
2008/11/03 1000 1.90
2008/11/03 1000 1.93
2008/11/03 1000 1.92
2008/11/03 1000 1.90
2008/11/03 1000 1.90
2008/11/03 1000 1.90
2008/11/04 1000 1.89
2008/11/04 200 1.86
2008/11/04 1000 1.88
2008/11/04 1000 1.88
2008/11/04 1000 1.89
2008/11/04 1000 1.90
2008/11/04 1000 1.88
2008/11/04 4200 1.89
2008/11/04 1000 1.88
2008/11/04 1000 1.88
2008/11/04 2900 1.90
2008/11/04 1000 1.89
2008/11/06 1000 1.70
2008/11/06 7000 1.69
2008/11/06 1000 1.69
2008/11/06 1000 1.69
2008/11/06 1000 1.69
2008/11/06 1000 1.70
2008/11/06 1000 1.70
2008/11/06 4200 1.69
2008/11/06 500 1.68
2008/11/06 1000 1.69
2008/11/06 1000 1.69
2008/11/06 500 1.67
2008/11/06 1000 1.70
2008/11/06 1000 1.70
2008/11/06 1000 1.68
2008/11/06 1000 1.69
2008/11/07 1000 1.70
2008/11/10 1000 1.68
2008/11/10 1000 1.69
2008/11/10 1000 1.71
2008/11/10 1000 2.75
2008/11/10 1000 1.88
2008/11/10 1000 2.00
2008/11/10 1000 2.59
2008/11/10 1000 1.79
2008/11/10 1000 1.90
2008/11/10 1000 1.79
2008/11/10 1000 1.79
2008/11/10 1000 1.69
2008/11/10 1000 1.72
2008/11/10 1000 1.71
2008/11/10 1000 2.00
2008/11/10 300 1.70
2008/11/10 1000 1.75
2008/11/10 1000 2.25
2008/11/10 1000 1.83
2008/11/10 1000 1.69
2008/11/10 1000 1.75
2008/11/10 1000 2.59
2008/11/10 499 1.68
2008/11/11 6600 1.67
2008/11/11 2500 1.71
2008/11/11 2500 1.69
2008/11/11 1500 1.70
2008/11/11 500 1.69
2008/11/11 12000 1.71
2008/11/11 5000 1.68
2008/11/12 1000 1.65
2008/11/12 1000 1.64
2008/11/12 500 1.62
2008/11/12 1000 1.64
2008/11/12 1500 1.69
2008/11/12 2000 1.87
2008/11/12 100 1.61
2008/11/12 1000 1.64
2008/11/12 2500 1.72
2008/11/12 1000 1.65
2008/11/12 10000 1.81
2008/11/12 1000 1.64
2008/11/12 1000 1.62
2008/11/12 1000 1.65
2008/11/12 1500 1.69
2008/11/12 1500 1.72
2008/11/12 100 1.62
2008/11/12 1500 1.64
2008/11/12 10000 1.72
2008/11/12 1000 1.63
2008/11/12 2500 1.73
2008/11/12 1000 1.64
2008/11/12 2000 1.65
2008/11/12 1000 1.64
2008/11/12 2500 1.73
2008/11/12 1000 1.64
2008/11/12 1000 1.65
2008/11/12 5000 1.70
2008/11/12 2500 1.69
2008/11/12 1000 1.62
2008/11/12 100 1.68
2008/11/12 1000 1.63
2008/11/12 1000 1.65
2008/11/12 1000 1.64
2008/11/12 15000 1.71
2008/11/13 25000 1.64
2008/11/13 10000 1.73
2008/11/14 1000 1.70
2008/11/14 1000 1.70
2008/11/14 100 1.67
2008/11/14 1000 1.69
2008/11/14 1000 1.69
2008/11/14 1000 1.69
2008/11/18 1000 1.63
2008/11/18 1000 1.61
2008/11/18 999 1.60
2008/11/18 1000 1.62
2008/11/18 1000 1.58
2008/11/18 1000 1.62
2008/11/18 1000 1.59
2008/11/18 1000 1.61
2008/11/18 1000 1.62
2008/11/18 1000 1.60
2008/11/18 1000 1.58
2008/11/19 25000 1.55
2008/11/19 7500 1.61
2008/11/19 14700 1.64
2008/11/20 1000 1.64
2008/11/20 15000 1.66
2008/11/20 5000 1.65
2008/11/20 10000 1.60
2008/11/20 1000 1.65
2008/11/20 10000 1.62
2008/11/20 10000 1.60
2008/11/20 10000 1.57
2008/11/20 10000 1.64
2008/11/20 10000 1.60
2008/11/20 10000 1.64
2008/11/20 10000 1.59
2008/11/20 5000 1.58
2008/11/21 13300 1.54
2008/11/21 1000 1.65
2008/11/21 15000 1.61
2008/11/21 10000 1.64
2008/11/21 1000 1.57
2008/11/21 7500 1.56
2008/11/21 2500 1.57
2008/11/21 10000 1.54
2008/11/21 1000 1.56
2008/11/21 1000 1.56
2008/11/21 1000 1.53
2008/11/21 1000 1.56
2008/11/21 1000 1.58
2008/11/21 1000 1.56
2008/11/24 1000 1.63
2008/11/24 1000 1.64
2008/11/25 1145 1.61
2008/11/25 7000 1.61
2008/11/25 10000 1.63
2008/11/25 8000 1.64
2008/11/28 600 1.60
2008/11/28 6100 1.62
2008/11/28 1000 1.62
2008/11/28 1000 1.64
2008/11/28 6000 1.61
2008/11/28 1000 1.63
2008/11/28 1000 1.62
2008/11/28 4200 1.62
2008/11/28 4600 1.62
2008/11/28 1000 1.62
2008/12/01 1000 1.59
2008/12/01 4400 1.56
2008/12/01 1000 1.59
2008/12/01 1000 1.59
2008/12/01 1000 1.59
2008/12/01 1000 1.57
2008/12/01 1000 1.59
2008/12/01 1000 1.59
2008/12/01 4800 1.57
2008/12/01 1000 1.59
2008/12/01 6200 1.57
2008/12/01 1000 1.59
2008/12/01 1000 1.59
2008/12/01 1000 1.59
2008/12/03 1000 1.53
2008/12/03 1000 1.55
2008/12/05 2500 1.37
2008/12/05 1500 1.38
2008/12/05 2500 1.37
2008/12/05 2500 1.38
2008/12/05 10000 1.37
2008/12/05 6500 1.38
2008/12/05 1000 1.37
2008/12/05 2500 1.37
2008/12/05 2500 1.39
2008/12/05 2200 1.38
2008/12/05 1500 1.39
2008/12/05 2500 1.38
2008/12/05 2500 1.39
2008/12/05 10000 1.39
2008/12/05 10000 1.35
2008/12/05 5000 1.37
2008/12/08 1000 1.43
2008/12/08 5000 1.39
2008/12/08 1500 1.30
2008/12/08 20000 1.35
2008/12/08 5000 1.28
2008/12/08 2500 1.35
2008/12/08 1500 1.30
2008/12/08 100 1.41
2008/12/08 100 1.40
2008/12/08 1000 1.42
2008/12/08 5000 1.40
2008/12/08 20000 1.38
2008/12/08 1000 1.43
2008/12/08 4500 1.37
2008/12/08 2500 1.30
2008/12/08 2500 1.38
2008/12/08 10000 1.36
2008/12/09 1000 1.25
2008/12/09 1000 1.24
2008/12/09 1000 1.23
2008/12/09 200 1.23
2008/12/09 1000 1.24
2008/12/09 2300 1.27
2008/12/09 1000 1.25
2008/12/09 1000 1.24
2008/12/09 200 1.25
2008/12/09 1000 1.25
2008/12/09 1000 1.25
2008/12/09 1000 1.25
2008/12/09 1000 1.25
2008/12/09 1000 1.26
2008/12/10 1000 1.21
2008/12/10 6500 0.98
2008/12/10 1000 1.08
2008/12/10 1000 0.96
2008/12/10 1000 1.24
2008/12/10 5800 0.90
2008/12/10 1000 0.97
2008/12/10 1000 1.30
2008/12/10 1000 0.93
2008/12/10 1000 1.08
2008/12/10 1000 0.93
2008/12/10 1000 0.96
2008/12/10 1000 1.35
2008/12/10 1000 1.33
2008/12/10 1000 1.13
2008/12/10 1000 0.98
2008/12/10 4300 0.97
2008/12/10 1000 0.96
2008/12/10 1000 0.96
2008/12/10 1000 1.11
2008/12/10 1000 1.14
2008/12/10 1000 1.00
2008/12/10 1000 1.12
2008/12/10 4800 1.09
2008/12/10 9700 0.96
2008/12/10 1000 0.94
2008/12/10 1000 0.96
2008/12/10 1000 1.12
2008/12/10 300 1.35
2008/12/10 1000 1.01
2008/12/10 1000 0.95
2008/12/10 4500 0.91
2008/12/10 1000 0.93
2008/12/10 1000 0.95
2008/12/11 1000 0.86
2008/12/11 1000 0.85
2008/12/11 1000 0.85
2008/12/11 1000 0.85
2008/12/11 1000 0.86
2008/12/11 1000 0.86
2008/12/11 1000 0.86
2008/12/12 1000 0.84
2008/12/12 1000 0.79
2008/12/12 1000 0.81
2008/12/12 1000 0.84
2008/12/12 1000 0.83
2008/12/12 1000 0.79
2008/12/12 1000 0.82
2008/12/12 1000 0.78
2008/12/12 1000 0.85
2008/12/12 1000 0.81
2008/12/12 1000 0.84
2008/12/12 1000 0.84
2008/12/12 1000 0.80
2008/12/15 1000 0.81
2008/12/15 1000 0.82
2008/12/15 1000 0.81
2008/12/15 1000 0.82
2008/12/15 1000 0.81
2008/12/16 2500 0.77
2008/12/16 1000 0.79
2008/12/16 2500 0.80
2008/12/16 5000 0.82
2008/12/16 5000 0.81
2008/12/16 100 0.83
2008/12/23 2500 0.90
2008/12/23 1900 0.83
2008/12/23 1500 0.90
2008/12/23 1250 0.86
2008/12/23 5000 0.90
2008/12/23 5000 0.87
2008/12/23 5000 0.86
2008/12/29 1000 0.85
2008/12/29 1000 0.84
2008/12/29 1000 0.84
2008/12/29 1000 0.84
2008/12/30 2000 0.89
Exhibit C
KSA
--------------------
MIDOCEAN
4 Essex Avenue
Bernardsville, NJ 07924
T. 908-766-3331
F. 908-766-4738
December 30, 2008
Board of Directors
Intertape Polymer Group, Inc.
3647 Cortez Road West
Bradenton, FL 34210
Dear Members of the Board of Directors,
As you may be aware, KSA Capital Management LLC ("KSA") filed a Schedule 13D in
which we disclosed a 5.1% ownership stake in the Intertape Polymer Group
("ITP"). KSA believes ITP is a mismanaged company and that its Executive
Director Melbourne Yull, Chairman of the Board of Directors Eric Baker, and the
Board of Directors (the "Board") have serious and well documented fiduciary
conflicts with shareholders and that the Board should immediately begin a
process to put the company up for sale or change the management team and reform
its corporate governance. We believe that ITP, with the right management team
and enhanced corporate governance, could return itself to a higher level of
profitability and growth. Moreover, it is our opinion the majority of ITP's
shareholders have no confidence in Mr. Yull and the current Board and would
support the commencing of a process that would ultimately lead to either the
sale of the company or the replacement of Mr. Yull and the current Board of
Directors.
It is our opinion that ITP's operational and financial problems began in the
late 1990s, when, under the leadership of CEO Mr. Yull, the company made a
number of poorly timed and expensive acquisitions which burdened ITP's balance
sheet with excessive debt and ultimately created significant liquidity
challenges for the company. These problems were exacerbated during the 2000-01
recession. Ultimately we believe that ITP's operational problems became
reflected in its share price which fell from $33 in August of 1999 to below $5
per share in the fall of 2002. Over the last ten years, during which Mr. Yull
held significant management positions, there has been turmoil at ITP.
As outlined below, it is our belief that ITP's central problems resulted from
the poor acquisitions and excessive leverage that took place over the last 10
years. However, they reached a critical juncture when in May of 2006 Mr. Yull
unexpectedly announced that he would be retiring at the company's upcoming
shareholder meeting. It is our belief that neither Mr. Yull nor the Board had a
succession plan in place. The Board hired an executive search firm to identify a
candidate to serve as ITP's CEO. We feel that Mr. Yull left the company with no
permanent CEO in place, a highly leveraged balance sheet, and significant
operating challenges. Despite this Mr. Yull claimed in a May 1, 2006 press
release, "I leave with full confidence that the future of the company and its
continued growth is in excellent hands."
However, in June of 2006, just weeks after Mr. Yull's unexpected retirement and
still without a permanent CEO, the Board announced a significant restructuring
charge resulting from plant closings, asset write-downs and environmental
remediation expenses. Moreover, in October of the same year ITP announced that
it would report a significant decline in revenues and may not be in compliance
with certain financial covenants. Just weeks later the company announced that it
would be taking a significant write down and impairment charge related to
goodwill recorded at the time of various acquisitions made from 1996 through
2000, a period when Mr. Yull was CEO.
In May of 2007, after numerous restructurings and still without a permanent CEO,
the Board announced that it received and accepted an offer to sell ITP to
private equity firm Little John & Co. for $500MM or $4.76 per share. Mr. Yull,
despite having left ITP, worked with 6789536 Canada, Inc. and Mr. Baker, to
nominate a slate of directors and file a dissident proxy statement to dissuade
shareholders from voting for the buyout because, among other things, they felt
it did not represent fair value for the company. Ultimately the shareholders
rejected the offer. Mr. Yull convinced ITP shareholders to vote for his agenda
even though third-party firms such as Institutional Shareholder Services
recommended taking the Little John offer. In fact ITP published a press release
on June 21, 2007 stating the following:
ISS indicated that the dissident proxy circular does not offer
shareholders a higher price nor any new choice other than to forgo the
all cash offer of US$4.76 per share. ISS also indicated that the
dissident, whose nominees for election as directors include the former
CEO of Intertape, has provided no compelling strategy for the company
going forward that would indicate a significant change from the
company's performance over the last several years.
On June 19, 2007, the Board of Intertape met to consider the Dissident
Proxy Circular and determined that the Dissident's proposals are not
in the best interests of Intertape shareholders and involved
significant risks and confirmed its support for the announced proposed
plan of arrangement. The Board also found the Dissident Proxy Circular
to be vague and lacking specifics and noted significant flaws and
other deficiencies in the Dissident's proposals.
Despite ISS's stated concerns over Mr. Yull's agenda and, in our opinion, his
prominent role in the mismanagement of the company, on June 28th, 2007 the slate
of directors nominated by 6789536 Canada, Inc. was elected and Mr. Yull became
Executive Director of ITP. However, the dissident proxy did state that Mr. Yull
would be appointed as Executive Chairman of ITP for only, "a period of three to
six months" and that the newly elected Board would commence "the selection and
appointment of a new Chief Executive Officer of Intertape Polymer within 90 to
180 days."
Immediately after installing a new Board and Mr. Yull as Executive Director, ITP
created highly unusual Advisory Service Agreements that would economically
benefit shell companies where the major shareholders were the new Executive
Director Mr. Yull, Chairman of the Board Mr. Baker, and former CFO and longtime
colleague of Mr. Yull, Andrew Archibald. An ITP filing with the Securities and
Exchange Commission dated May 7, 2008 states the following:
The Corporation entered into an Advisory Services Agreement dated as
of August 1, 2007, as amended, with Sammana Group, Inc. ("Sammana").
Melbourne F. Yull, the Executive Director of the Corporation, is a
director, officer and shareholder of Sammana. . . . As compensation,
the Corporation pays Sammana a fee of $50,000 per month, for the
period which commenced January 1, 2008 and continuing for a period of
not less than three months. The Corporation also paid Sammana a fee of
$300,000 with respect to the services provided by Sammana to the
Corporation in connection with the rights offering effected by the
Corporation in 2007. . . . The Advisory Services Agreement does not
end should Melbourne F. Yull cease to be a member of the Board of
Directors or Executive Director of the Corporation.
The Corporation also entered into an Advisory Services Agreement dated
as of August 1, 2007, as amended, with Altacap II Inc. ("Altacap").
Eric E. Baker, the Chairman of the Board of Directors of the
Corporation, is a director, officer and shareholder of Altacap. . . .
As compensation, the Corporation pays Altacap a fee of Cdn.$100,000
per month, for the period from January 1, 2008 to December 31, 2009.
The Corporation also paid Altacap a fee of Cdn.$600,000 with respect
to the services provided by Altacap to the Corporation in connection
with the rights offering effected by the Corporation in 2007.
The Corporation also entered into an Advisory Services Agreement dated
as of August 1, 2007, as amended, with Archibald Global Enterprises,
Inc. ("Global"). Andrew M. Archibald, C.A., the former Chief Financial
Officer of the Corporation, is a director, officer and shareholder of
Global. . . . As compensation, the Corporation pays Global a fee of
$25,000 per month, for the period commencing January 1, 2008 and
continuing for a period of not less than six months. The Corporation
also paid Global a fee of $150,000 with respect to the services
provided by Global to the Corporation in connection with the rights
offering effected by the Corporation in 2007, less any amounts paid to
Global directly by the Corporation during 2007.
In October of 2007, shortly after Mr. Yull and the newly elected Board took
control of the company, ITP raised $42.2MM through a rights offering which
resulted in approximately 18MM shares being issued at $3.44, 28% below the
Little John offer. The proceeds were used to reduce long-term debt. This was a
necessary step as the debt burden created by the company's previous acquisition
binge had become unbearable. It is our belief that as part of the agreement to
complete the recent rights offering, CEO Mr. Yull promised shareholders to step
down in a reasonable time period once the transaction was closed and the company
finished an executive recruiting process. However, Mr. Yull has not stepped down
and on a recent conference call on March 31, 2008 said, "Now, the Board has
definitely not said we are not going to put in a new CEO. It's under constant
evaluation, but we're very pleased with the performance of the structure that is
now in dividing the company into two divisions with two presidents". In our
opinion it appears that Mr. Yull has no intention of stepping down in his role
as Executive Director and that the Board is not seriously pursuing any hiring
process for a new CEO. This has caused significant tension among investors and
Yull. On May 20, 2008 Brandes Investment Partners, L.P. filed a press release
stating "Brandes was an underwriter of ITP's rights offering last fall,
participating with the understanding that a new CEO would be identified not
later than the end of January 2008."
Despite a significantly improved balance sheet and strong competitive position,
we believe ITP continues to be poorly managed and lacks proper Board oversight.
The company's stock has fallen to below $1 per share. We believe ITP's shares
are worth significantly more than the current price and that if it were to be
put up for sale there would be significant interest.
Based on the last twelve month's adjusted EBITDA of $70 million, the shares
trade about 4.2 times trailing adjusted EBITDA. We believe that maintenance
Capital Expenditures are no more than $10MM per annum. Additionally, we
understand that ITP currently has approximately $195MM in US Net Operating
Losses ("NOLs") & $65MM in Canadian NOLs that will result in the company paying
very little, if any cash taxes over the foreseeable future.
We believe in a more normalized business environment, EBITDA under an improved
management team could realistically reach $100 million. Despite very tough
market conditions, adjusted EBITDA through the first nine months of 2008 is only
down modestly at $52.2 million compared to $55.3 million of EBITDA generated in
the first nine months of 2007. This is despite a significant weak North American
economy and surging raw material costs through the September quarter. Recently
raw material costs have collapsed and should provide a benefit to ITP in 2009.
However, volumes have also been very weak and will need to stabilize for ITP to
begin to get the full benefit of lower raw material costs. We believe that under
the right leadership, ITP would be a great platform for growth in the North
American flexible packaging industry. The flexible packaging industry that ITP
competes in is large, fragmented, and dynamic and offers great opportunity for
product and strategic differentiation. With almost $1BN in annual sales, ITP is
in a unique position to benefit from longer term industry consolidation and
growth.
To conclude, KSA is deeply concerned over the length and structure of the
compensation agreement that has been established between ITP and entities in
which certain ITP directors including Mr. Yull and Mr. Baker have significant
economic interests. We also believe that ITP would be in better hands and have a
brighter future with a new CEO and a professional Board with experience in
running and growing packaging companies. KSA insists that the Board of Directors
and Executive Director Mr. Yull be replaced and/or the company commences the
process of putting itself up for sale immediately. KSA believes there would be
meaningful interest in ITP if the company pursues a sale process and that there
is still an existent opportunity to recover substantial value for its
shareholders.
Sincerely,
Daniel D. Khoshaba
Managing Member of the General Partner
SK 21884 0001 950338