Skellerup to acquire Italian Rubber Manufacturer

Published: Thu 5 Apr 2007 11:30 AM
4 April 2007
Skellerup to acquire Italian Rubber Manufacturer
Skellerup Holdings Limited has entered into an agreement to purchase Tumedei SpA, an Italian manufacturer of custom-designed technical rubber products for the automotive, petrochemical, gas, water and irrigation markets.
Skellerup chairman Keith Smith said the purchase would add further reach and depth to Skellerup’s existing technical rubber businesses led by Gulf Rubber, which had maintained a strong level of performance since acquisition in 2006.
“Tumedei has proven technical capabilities and products that will fit well into our business, and enhance our strategy of expanding our technical rubber capabilities and markets,” Mr Smith said. “It has built strong domestic and export businesses from its base in Bologna, Italy. Approximately 30 percent of its sales are from export – to other parts of Europe, North and South America, the Middle East and India.”
Gulf Rubber, based in Sydney and Auckland, designs and manufactures highly technical rubber and associated polymer products used in the automotive, appliance, medical, construction, mining, valve control and irrigation industries. Gulf Rubber was purchased in February 2006.
The purchase of Tumedei, for $19.6 million, brings revenues of close to $15 million and earnings before interest, taxation, depreciation and amortisation (EBITDA) of between $3.5 million and $4 million. Settlement is anticipated by 30 April 2007. Final agreement and settlement are subject to certain conditions, which are principally formal documentation satisfactory to Skellerup, regulatory approvals and the absence of any pre-settlement material adverse change in the business.
Mr Smith said the acquisition is intended to be funded initially through bank facilities. “No decision has been made at this stage about longer-term funding arrangements. The Board will be considering alternatives over the coming months in the context of its ongoing review of the whole group’s capital structure.”
In view of the timing of the acquisition and its impact on the factors affecting the group’s long-term capital structure, the Board has taken the decision to postpone the special meeting of shareholders scheduled for 26 April 2007, which was called to consider an issue of shares under the Long Term Executive Incentive Scheme.
“The Board believes it is appropriate to delay this meeting until the acquisition and related matters are resolved, to ensure that shareholders can be fully informed and in a position to assess the impact on the company,” Mr Smith said. “A new date for the meeting will be announced in due course.”
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