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Fletcher Building’s Formica business is to buy the remaining 50% of metal and sheet laminates manufacturer and distributor Homapal it does not already hold, for €30 million ($NZ48 million).
Formica has been a 50% shareholder and largest customer of the Germany-based company since 1983.
The transaction is scheduled to be completed on April 2 and represents a 7.9 x EBIT multiple on current earnings before synergies.
As a subsidiary of Formica, the Homapal brand, leadership team and business model will remain unchanged.
Formica says full ownership of Homapal will increase Formica’s presence in Germany, one of the world’s largest laminate markets and where Homapal already has a strong market position.
Homapal manufactures laminates of aluminum, brass, copper and other metal foil in various plain and design effects.
Its manufacturing facility is located in the centre of Germany, approximately 100 km south of Hanover and 250 km from Hamburg, and employs 70 people. Formica currently procures and distributes approximately 40% of Homapal output while a network of strategic business partners distributes the remaining 60%.