Steel & Tube completes acquisition

By Phil Boeyen, ShareChat Business News Editor

Wednesday 15th May 2002

Lower Hutt-based Steel &Tube (NZSE: STU) has completed the $11.7 million purchase of Pipeline Supplies NZ following approval by shareholders.

The company held a special meeting on Tuesday to deal with the purchase and reports that the resolution approving the acquisition was passed.

Pipeline Supplies, formerly owned by Australian listed steel company OneSteel, imports and distributes industrial pipes, valves and fittings through its branches in Auckland, New Plymouth, Wellington and Christchurch.

Steel & Tube boss, Nick Calavrias, told the special meeting yesterday that the acquisition fits the company's core business and will strengthen existing investment in the reticulation sector of the steel distribution market.

"Although Pipeline Supplies is a well managed and profitable New Zealand company, further financial benefits will be possible through synergy gains with Steel & Tube.

"By this, I am referring to amalgamation of our purchasing requirements that will enable us to buy product cheaper than at present and open new market opportunities to one another's products. In addition to this we will be able to obtain cost benefits by operating under the one computer system."

A report into the acquisition said Pipeline Supplies would be earnings per share positive for Steel & Tube from year one.

Comments from our readers

No comments yet