Expanding PaperlinX buys Canterbury Packaging for $A2m
The Australian-based paper merchant and distributer will bundle the new acquisition into its existing New Zealand Spicers business, adding annual revenue of $A2.9 million.
BUSINESSDESK: ASX-listed PaperlinX will spend $A2 million expanding its New Zealand operations by buying Canterbury Packaging a fortnight after signalling its intention to quit Eastern Europe and South Africa.
The Scoresby, Victoria-based paper merchant and distributer will bundle the new acquisition into its existing New Zealand Spicers business, adding annual revenue of $A2.9 million, it says.
The deal is expected to be completed by October and will be funded through local credit facilities within Spicers. Canterbury Packaging distributes industrial packaging, consumables, hygiene, safety and hospitality products, primarily in Christchurch.
"This acquisition will provide a building block for Spicers New Zealand to diversify and leverage our existing footprint and infrastructure to build a national business with the expertise from Canterbury Packaging," executive general manager for Australia, New Zealand and Asia Andy Preece says.
"The additional packaging consumables will build on the existing strong market position of our profitable Spicers business in New Zealand."
PaperlinX's New Zealand unit reported a profit of $4.5 million on sales of $123.4 million in the year ended June 30, 2011, financial statements lodged with the Companies Office reveal.
The Australian parent has been restructuring its business, warning shareholders it faces an annual loss of $A171 million in the year ended June 30 on tough trading conditions and write-downs.
Last month it announced the sale of operations in Slovakia, Hungary, Slovenia, Croatia, Serbia and South Africa after earlier moves to divest its Italian and US businesses.
PaperlinX chief executive Toby Marchant stepped down after the radical overhaul was unveiled.
The shares were unchanged at 6.2 Australian cents on the ASX on Friday, having shed 26% this year.
The stock is rated an average "hold" by five analysts' recommendations compiled by Reuters, with a median target price of 8 cents per share.
Paul McBeth
Mon, 06 Aug 2012
Mon, 06 Aug 2012
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Expanding PaperlinX buys Canterbury Packaging for $A2m
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