Skellmax Industries is set to take its rubber products beyond the rural sector with its $32 million purchase of Australia's Gulf Rubber.
The manufacturer of Red Band gumboots and vacuum pumps for the dairy industry yesterday said it had bought the Australasian businesses of high-tech rubber-maker Gulf, effective from February
1.
Sydney-based Gulf designs and makes rubber products for niche sectors of the automotive, appliance, medical, construction, mining and irrigation industries.
Skellmax managing director Donald Stewart said the purchase would grow its international presence and maximise the benefits of Asia-based manufacturing.
"Gulf provides Skellmax with access to new markets. It also opens the doors to new multinational customers."
Skellmax expected to leverage some of Gulf's technical expertise into its existing business, and Gulf, which would remain a standalone entity, would be able to take advantage of Skellmax's marketing bases already established in Europe and North America.
The price comprises $21 million cash plus $5 million in Skellmax shares and a deferred cash payment of $6 million for 12 months.
Gulf is forecast to earn a trading profit of $5.6 million this year on revenue of $35 million.
Exports account for about 20 per cent of its sales.
It has sales, research and development, and some manufacturing operations in Australia and New Zealand, with most manufacturing being carried out in Asia under contract.
Skellmax has a rubber factory in China and also makes vacuum pumps there.
Skellmax shares were down 1c yesterday to $1.22.
