PDL move puzzling

By Chris Hutching

Friday 27th October 2000

There was little reaction this week to listed PDL's plans to sell its PDL Plastics division for $25 million as brokers and investors struggle to come to grips with its significance.

The general manager of PDL Plastics, Mark Wheeler, and five senior managers are buying the company in partnership with ANZ Private Equity.

The $25 million price is slightly more than book value. The listed PDL Holdings will concentrate on its electronics developments.

In the year to March the plastics division gleaned revenue of $34 million (20% from exports) and a surplus before interest and tax of $4 million on assets of $31 million.

PDL's total sales in the year to June were $357 million, and total assets were $230 million. The plastics division employs 130 people in Christchurch, 240 in Auckland. It will be renamed Alto Plastics.

Upcoming challenges for the company include the fluctuating currency and price of oil.

Brokers said this week there had been little reaction judging from the share price, which is just under $4. One said the founding Stewart family's large stake in PDL remained a problem in his view.

The role of ANZ in setting up a private equity division follows recent moves by AMP.

ANZ Private Equity is only about halfway to achieving its $100 million target for investing in small business acquisitions or assisted management and leveraged buyouts, according to director Todd Strathdee.

The PDL Plastics move was the second ANZ purchase in weeks. The other deal involved a telecommunications company in Australia. "We're working closely with the bank's customer base on this. We're looking at taking these companies a stage further and adding value for ANZ shareholders."

The rationale behind ANZ Private Equity's buying spree was spelled out by ANZ chief executive John Macfarlane to a small meeting of sharebroking analysts recently.

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