Friday 28th October 2011
|Text too small?|
Nuplex Industries agreed to acquire Bayer MaterialScience’s Viverso for 75 million euros, adding resins production in Germany and helping lift 2012 earnings by about 10 percent.
The specialty chemicals company will debt fund the acquisition and has increased its debt facilities to A$300 million from A$200 million to cover the cost, it said in a statement today. The purchase price is about 6.5 times the target’s pro-forma annual earnings before interest, tax, depreciation and amortisation.
The purchase “will give us greater access to the German industrial market,” said chief executive Emery Severin. “It will also provide us with closer proximity to the emerging Central and Eastern European economies, where Viverso has strong market positions.”
The earnings guidance takes into account the contribution from Viverso and the purchase of Acquos’s Masterbatch business, announced last month, for A$23.5 million. Excluding the acquisitions, EBITDA would be little changed from last year’s $130.0 million, it said.
Severin said volumes in the 2012 financial year would be similar to 2011 though a rising New Zealand dollar would erode the value of earnings. Still, raw material costs had stabilised, helping gross margins return “to more normal levels.”
The company expects a “modest slow down” in Europe and the US and in recent months, trading conditions have been volatile “as customers have been demonstrating caution in an uncertain, global economic environment,” he said.
The forward order book indicates a return to more stable trading in the next few months, he said.
Severin expects “modest volume growth” in Asia, with its plant at Suzhou, China, operating near capacity and its Malaysian factory working at capacity. Subdued economic conditions in Australia and New Zealand will see sales and volumes down in both its resins and specialty chemicals divisions.
Funding the acquisition will see Nuplex’s net debt to debt plus equity more than double to 27 percent from 12 percent as at June 30, with total net debt rising to $210 million. The company said the gearing was still appropriate.
As part of the deal, Nuplex will also toll manufacture products for Bayer via contracts ranging from two to 10 years, it said.
The Viverso plant, in Bitterfeld, Germany, was built in 1995 and will add about 50 percent to Nuplex’s regional capacity. The deal requires regulatory approval in Germany.
Nuplex’s shares rose 1.5 percent to $2.70 and have dropped about 25 percent this year. The stock is rated ‘outperform’ based on a Reuters poll, with a price target of $3.09.
No comments yet
Nuplex targets half billion dollar Asian sales within five years
Nuplex FY profit drops 31 percent on weak ANZ, EMEA markets, writedowns
Nuplex cuts FY guidance again as Australian manufacturing splutters; stock drops
Nuplex 1H profit misses forecasts; annual guidance cut on strong kiwi, weak trading conditions
Nuplex looks at imputing future dividends, flags increased earnings
Nuplex plans restructuring in Australia, NZ to cut 2013 profit
Nuplex FY profit falls, guidance met
Nuplex raises US$105M in US private placement
Nuplex sees full-year earnings at bottom of range
Nuplex 1H profit drops 23% on Australasian weakness