Resin manufacturer Nuplex has bought the customer-base, import relationships and inventory of an Australasian ingredients business.
The Australian and New Zealand arms of the Med-Chem group's ingredients business will be transferred into Nuplex ownership tomorrow.
That part of Med-Chem's business imports raw ingredients such as dextrose, maltodextrin, and fructose that
are supplied to companies across Australia and New Zealand, including dairy giant Fonterra.
Nuplex shares closed up 13c yesterday at $3.45.
The acquisition was expected to increase the earnings of Nuplex's specialties business by about 15 per cent over the next 12 months.
No fixed assets were included in Nuplex's acquisition, and the remaining assets of the privately owned Med-Chem Group would remain with their current owners.
Nuplex did not disclose the amount paid for the acquisition, but said it would be made public at the end of the financial year.
Nuplex managing director John Hirst said the acquisition would expand the company's footprint in the Australasian specialties market.
"The strategy is to grow in that direction as far as Australasia is concerned, so this [acquisition] is just being totally true to that strategy," he said.
Hirst said the specialties side of Nuplex's business mainly sourced and distributed products for three market segments - chemicals, plastics and life sciences.
Very little manufacturing was carried out in the specialties side of Nuplex's business, he said, which accounted for about 15 per cent of its revenue.
Nuplex is more well known for manufacturing solvent, water-and powder-based resins used in the paper, construction and adhesive industries, as well as polyester resins and gelcoats used in the marine, swimming pool and construction industries.
Life sciences specialties required a high level of compliance management.
Hirst said Nuplex planned to increase the amount of high compliance products it dealt with.
Geoffrey Walker, chief executive of the Med-Chem group, said the company decided to offload its ingredients trade so it could focus on its surgical supply business.
"The food ingredients business is more and more being dominated by pretty large players ... which makes it tougher for little guys like us," he said.
