Imasco

Imasco Limited

Industry	Tobacco, Restaurants, Pharmacies, Trusts
Founded	1970
Headquarters	Montreal, QC, Canada
Revenue	$8.8 million USD (1989)
Net income	$22.5 million USD (1987)
Owner	British American Tobacco
Number of employees	157,300 (1989)
Parent	British American Tobacco
Website	Imasco.com

Imasco Limited was headquartered in Montreal, Canada. It was founded in 1970 as Imperial and Associates, Co.

Imasco was the former owner of Imperial Tobacco Canada, Canada Trust, Shoppers Drug Mart and the Hardee's restaurant chain. The company sold Hardee's in 1997 to CKE, Canada Trust in 2000 to Toronto-Dominion Bank and Shopper's Drug Mart in 2000 to a consortium of institutional investors. British American Tobacco, or BAT, had owned 41.5% of Imasco's shares. In 2000 British American Tobacco purchased the remaining 58.5% shares in Imasco and amalgamated the company with Imperial Tobacco Canada Limited.

Imasco was unbundled when its shareholders overwhelmingly approved an $11 billion takeover from BAT, which held a controlling interest in Imasco since it had been created in 1970. It created value for its shareholders through spurts of share price appreciation and regular dividend payments. It just didn't add enough shareholder value.

But, it was a mistake that was built to last. It was a consumer products conglomerate that managed to survive by relying on an immense cash flow from a virtual monopoly of the Canadian tobacco industry. Tobacco profits papered over numerous and consistent failures in both Imasco's diversification and operating strategies, wasting enormous amounts of shareholders' money throughout the 29 years of its existence.

When Imasco was formed in 1970, the founding CEO thought there was only 10 good years left in the tobacco business and that the firm's diversification efforts had to make an effective contribution to Imasco's earnings in a short time frame. It was to successive management's immense relief that this expectation proved wrong. Imperial Tobacco's success in introducing low-tar or "light" cigarettes dramatically extended the lifespan of the Canadian tobacco industry and Imasco.

In Imasco's early years, shareholder value went unrealized as a result of a surprising number of ill-conceived attempts to diversify the earnings stream. From the 1970s through to the mid-1980s, shareholders had to endure consecutive futile investment efforts in such unrewarding initiatives as wineries, food processing, sporting goods, soft-drink retail distribution, natural resources, and magazine and cigarette retailing.