Australasian steel goods manufacturer Vulcan Steel is moving to buy the well established Ullrich Aluminium for $165 million.
Photo: RNZ / Cole Eastham-Farrelly
Vulcan, which is based in Auckland but controlled out of Australia, listed last November on stock exchanges on both sides of the Tasman. The company said the acquisition would expand its operations and was in line with its plans to be a leading metal products processor and distributor.
"The aluminium distribution market is an opportunity which Vulcan has been considering for many years. Ullrich's platform and network combined with Vulcan offer significant potential synergies," Vulcan chief executive Rhys Jones said.
The price was based on a $131m book value for Ullrich, plus $34m of its debt, which equated to 4.3 times its operating earnings for the year ended March.
The transaction is being funded by debt and will add to Vulcan's profitability in the 2023 financial year.
Vulcan was founded in 1995 and has operations in New Zealand and Australia distributing steel industrial products as well as processing and adding value to steel, at 29 sites employing about 850 staff.
In April it raised its full year guidance on the back of a 34 percent gain in revenue for the nine months ended March, forecasting a net profit between $136m and $140m.
The family owned Ullrich Aluminium was established in 1961 and through rapid expansion in the 1970/80s became a poster company for New Zealand manufacturing and exporting.
It makes a wide range of products from cladding, scaffolding and ladders, window frames, and products used in boat building. It has more than 600 staff in 43 operations in New Zealand and Australia.
Ullrich reported sales of $270m and a pre-tax profits of $36m in the year ended March.