Nuplex says sales up 70 per cent after Dutch purchase

12.20pm

Nuplex said today its sales revenue would grow around 70 per cent and ebitda (earnings before interest, tax, depreciation and amortisation) by more than 40 per cent as a result of buying the coatings resins business of Akzo Nobel in the Netherlands.

Even with the number of shares issued increasing 20 per cent, and the cost of additional borrowings, earnings per share would be 10 per cent higher, the company told shareholders at a meeting today to approve a share raising to fund the deal.

Nuplex shareholders are being offered the chance to buy shares at a 3.5 per cent discount to raise up to $15 million.

Nuplex has already partly funded the $202m purchase through a $56 million private placement of 11.6m shares to Australian and New Zealand institutional investors.

Managing Director, John Hirst told shareholders that Nuplex was the under-bidder for the company in what became a two horse race.

Nuplex's reputation within the industry, an appreciation that it would be a reliable strategic supplier, and good chemistry between the management groups were key elements in winning the bid at a lower price, he said.

"It will provide mass for efficiency and buying leverage, secure our competitive technology position for the future, and enable us to participate in further global growth opportunities," he said of the new company.

- NZPA