Nuplex buys German resin firm for $129m

Emery Severin, Nuplex chief executive. Photo / Natalie Slade

Resins maker Nuplex Industries said today that the newly-acquired Viverso GmbH would make a positive contribution to its earnings in the current financial year to June 30, 2012.

Nuplex said earlier it had agreed to buy Germany's Viverso, and its related operations and product groups, from Bayer MaterialScience (BMS) for 75 million euro ($NZ129m) in what would be a wholly debt-funded transaction.

Viverso specialises in environmentally-friendly, solvent-free, water-resistant resins used in construction coatings.

Nuplex said it had secured an additional debt facility of A$100m, which would increase its total debt facilities to A$300 million, and that it was looking at converting some of it into long-term debt through the US private placement market.

Following completion, Nuplex's net debt will be around $210m, the company said, taking its gearing ratio - net debt to net debt plus equity - to 27 per cent from the June 30 level of 12 per cent.

The transaction, which is subject to German regulatory approval, is expected to be completed by the end of 2011.

Nuplex said it expected to deliver 10 per cent year-on-year operating earnings growth in 2011/12 by combining the expected positive earnings contribution from Viverso with the earnings generated by Nuplex's existing operations, and the recently announced acquisition of Acquos's Masterbatch operations.

Excluding the two recent transactions, Nuplex said its operating earnings over 2011/12 would be roughly in-line with last year's of $130.9 million, based September quarter 2011 exchange rates.

Chief executive Emery Severin said volumes were expected to be of a similar level as last year, but he said the recent strengthening in the New Zealand dollar was likely to have the biggest negative impact on earnings.

"Our forecast is based on average September quarter exchange rates being maintained throughout the year,'' he said.

"Had average exchange rates remained the same as they were last year, earnings before interest, tax, depreciation and amortisation would be forecast to increase by about 5 to 6 per cent," he said.

Nuplex specialises in polymer resins, which are essential ingredients in a wide range of products used every day, from basic necessities, through consumer durables to luxury goods.

The company also distributes raw materials to a number of industries in Australia and New Zealand including the chemical, plastics, general industrial, food and pharmaceutical sectors.

Nuplex, based in Penrose, Auckland, shares last traded at $2,68, up 2c.