Chemicals specialist DGL Group has gone from strength to strength as a public company - buying five companies since listing in May, and is in the market to buy more.
The company, whose share price has tripled since its debut, said on Monday that it had bought Australian specialised bulk liquid haulage firm Shakell Transport in a cash and share deal worth $8.9m.
Last week, DGL bought AUSblue, which specialises in making the diesel exhaust fluid AdBlue, for $2.2m in cash and 4.5m in DGL shares.
In September, DGL acquired Profill Industries - a chemical manufacturer based in Wangara, Western Australia - for $7.65m.
Earlier the same month DGL bought Aquapac - which supplies water treatment chemicals to industry and local government customers across Australia - for $8m.
In August, DGL bought Opal Australia - a specialist contract formulator and packaging business based in Western Australia - for $8.6m.
DGL has also bought properties on both sides of the Tasman.
The company, a specialist chemicals business that makes, transports, stores and processes chemicals and hazardous waste, debuted on May 24 $1.10 - a 10 per cent premium to its $1.00 issue price, after successfully raising $100m from an IPO handled by Australia's Canaccord Genuity and Bell Potter.
The stock last traded at $3.10.
Raising money for growth
Founder and chief executive Simon Henry, who owns 56 per cent of the company, has not let grass grow under his feet since the company listed.
Henry said the IPO was not about selling down ownership of the company - as many are - but about raising funds for growth.
The stock has tripled in price since the IPO - valuing the company in total at $814m.
"It's been a roaring success," Henry told the Herald.
"Somehow the market seemed to have a lust for an old-fashioned company with the type of balance sheet that does something physical and produces a profit, as opposed to those companies that have a flashy story but no profit."
Henry decried the "take the money and run" approach" of some IPOs that have been designed to give existing owners a profitable exit.
"I came to the market to grow the business, not to sell the business, and I have bought shares post listing and I will buy more when I'm allowed.
"I went to the market and threatened to use the funds raised to grow the business and I don't ' make empty promises," he said.
"I threatened to expand rapidly and I am carrying out that threat."
Given the number of businesses bought already, and those in its sights, Henry said DGL could be seen as an aggregator.
"That's one way of looking at it.
"The idea is that DGL is a vertically integrated chemicals management company.
"I'm looking for missing pieces of the jigsaw so that we can provide all services in the field of chemicals management."
"We have a few months to go and then we will be the most comprehensive chemicals management company operating across New Zealand and Australia."
DGL has a number of acquisitions on the boil and, subject to due diligence, board approval and other processes, it will look to acquire those companies over the next 12 months, he said.
Henry said DGL had grown at 20 per cent a year for the last 20 years.
"I don't see any reason why that growth will slow down in the years to come," he said.
The company is keen to establish a presence in North America.
It is in the process of appointing staff and locating premises with a view to opening up a facility on the US West Coast.
As it stands, about 80 per cent of DGL's business is in Australia 20 per cent in New Zealand.
"We are keen to expand in New Zealand and there are a couple of companies that I am in discussions with.
"I hope to acquire of them in the New Year which will balance things back a bit."
Henry says the key to the company's growth path has been increasingly onerous compliance requirements in the treatment and handling of chemicals.
"I am a rare breed. I enjoy all the regulation that governments are keen on introducing in the management of chemicals because that's what our company does," he said.
The IPO raised $100 million but says there is still gas in the tank. DGL has not tapped into any business loans yet.
"When we get through the cash that we have raised in the IPO, we will tap into our credit lines."
Some way down the track DGL would look a doing a rights issue to keep reinvesting in the business.
He took some pride in the way the IPO went, which was three times oversubscribed, and the share price's performance since then.
"Everything I raised went back to the company and not one cent came back to me, so I'm probably unique," Henry said.
"It's a bit old-fashioned, isn't it?"