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Littlejohn to Buy Intertape Polymer

Published on May 3, 2007 at 12:52 AM

Intertape Polymer Group Inc. and Littlejohn & Co., LLC announced today that an indirect wholly-owned subsidiary of Littlejohn Fund III, L.P. will acquire all of the Company’s outstanding common shares at a price of US$4.76 per share in cash (the “Arrangement”) pursuant to a definitive agreement (the “Arrangement Agreement”) entered into by Intertape and such subsidiary. Including net debt outstanding, the total transaction value is approximately US$500 million.

The non-management members of the Board of Directors of the Company, after considering a number of factors, have unanimously approved the Arrangement and agreed to recommend that the Company’s shareholders approve the proposed Arrangement.

TD Securities Inc. (“TD Securities”), as financial advisor to the Company’s Board of Directors, has concluded that as at May 1, 2007, the consideration to be received under the Arrangement is fair, from a financial point of view, to the holders of the Company’s common shares.

Michael L. Richards, Chairman of the Board of Directors of the Company, said, “The signing of the Arrangement Agreement is the result of the review of strategic alternatives that was initiated by the Board of Directors in October 2006 with the objective of enhancing value for all of the Company’s shareholders. During the course of this review, the Board, with the assistance of TD Securities, evaluated a comprehensive range of value maximization alternatives for the Company in the context of its existing capital structure and current operating environment. These alternatives included the sale of the Company, raising additional equity, and the sale of one or more of the Company’s businesses to provide greater financial flexibility. This value maximization process included numerous strategic and financial parties.”

Edmund J. Feeley, Partner of Littlejohn, said “Intertape represents an opportunity for Littlejohn to invest in a market leader and work closely with their management team to generate operating performance improvements and drive growth. Based on Littlejohn’s successful track record of investing in companies like Intertape, we are confident that we can add value.”

Pursuant to the Arrangement, holders of the outstanding common shares of the Company would receive US$4.76 cash per share, which represents a 5.5% premium over the volume weighted average trading price on the NYSE over the 30 trading days prior to today’s announcement.

Michael L. Richards further stated, "The Board of Directors has carefully weighed the Arrangement against alternatives available to the Company, and has determined that the Arrangement provides the best value available to our shareholders." "Each member of the Board of Directors intends to vote his shares in favour of the Arrangement," he added.

H. Dale McSween, Interim Chief Executive Officer of the Company, said, “This transaction is also positive for our employees, customers and suppliers as Littlejohn is dedicated to continue to build on the strong market position of Intertape going forward.”

The transaction will be implemented by way of a court-approved plan of arrangement under Canadian law and accordingly, will be subject to the approval of two-thirds of the votes cast by the Company’s shareholders at a special meeting of shareholders anticipated to take place in late June 2007. In addition, the Arrangement will require approval by the Superior Court of Quebec in the District of Montreal. The transaction will be subject to certain other customary conditions described in the Arrangement Agreement, including receipt of a limited number of regulatory approvals and no material adverse change in the Company’s business. The transaction is not subject to any financing condition. Littlejohn has received a commitment for the required debt financing and Littlejohn Fund III, L.P. intends to fund the equity required to complete the transaction. It is anticipated that the Arrangement, if approved by the Company’s shareholders, will be completed early in the third quarter of 2007.

The Arrangement Agreement also provides for, among other things, a non-solicitation covenant on the part of the Company, a right in favour of Littlejohn to match any superior proposal and the payment of a termination fee to Littlejohn in the amount of US$5.9 million under certain circumstances.

A copy of the TD Securities’ fairness opinion, various factors considered by the Board in its determination to approve the Arrangement, as well as other relevant background information, will be included in the management information circular to be mailed within the coming weeks to the Company’s shareholders in advance of the special meeting to consider the Arrangement. Copies of the management information circular, the Arrangement Agreement and certain related documents will be filed with Canadian securities regulators and with the United States Securities and Exchange Commission and will be available at the Canadian SEDAR website at www.sedar.com and at the U.S. Securities and Exchange Commission's website at www.sec.gov.

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