Nuplex nails down latest acquisition
Nuplex’s purchase of the Med-Chem product range is expected to lift the earnings of the resin manufacturer’s specialties business by 15% a year.
The company is keeping quiet on the price of the acquisition but it includes the total goodwill of the Australian and New Zealand ingredient business of the Med-Chem group of companies.
Med-Chem’s other assets will remain with the current owner when the formal handover is made on Friday.
There are no job losses expected on the ground level in the acquisition, with Australasian staff who are directly related to sales and customer service joining Nuplex.
Med-Chem’s product range includes Roquette starch and starch derivatives and is supplied to customers in the food, pharmaceutical and personal care manufacturing industries in both New Zealand and Australia.
Nuplex managing director John Hirst – in one of his final deals with the company after 40 years' service – said the acquired product range had a strong market position and would provide further growth opportunities for the products in other industrial markets.
The picture at Nuplex was extremely different this time last year, when the resin maker was forced to raise capital to offset concerns about debt.
The concerns – which had set in after a massive loss in demand – evaporated in the wake of the capital raising, leaving the company with a strong balance sheet and streamlined business model, just as demand inevitably returned.
The manufacturer recently posted a 201% increase in operating profit and has seen its share price (NZX:NPX) climb steadily over the past eight months after consistent increases in guidance to sit above the $3.30 mark.
Nuplex has made no secret of its plans to use its new position to fuel further acquisitions and Mr Hirst said the latest one was consistent with the company’s targeting of growth in the Australasian high compliance sectors.
“The Med-Chem business will expand our agency base and continue our focus on functional materials where Nuplex’s in-house technical and compliance resources add value to distributed raw materials.”