Fletcher sells stake in metal recycling JV for $42M as it sheds non-core assets
By Sophie Boot
June 29 (BusinessDesk) - Fletcher Building is selling its stake in metal recycling company Sims Pacific Metals for $42
million as part of its new strategy to refocus on core businesses.
The half-share will be sold to its partner in the Sims Pacific joint venture, Sims Metals Management, Fletcher said, and
total proceeds are expected to be between $50 million and $60 million as the purchase price is "subject to a working
capital adjustment which will be finalised post acquisition". The joint venture was established in 1992 and is New
Zealand’s largest metal recycling company.
Last week, the company set out its five-year strategy to refocus on core businesses, stabilise the construction
division, expand in Australia and exit non-core operations. From July 1, it will be restructured into seven new
divisions, from five currently, including a stand-alone unit in Australia which could grow over the next five years to
equal or exceed the size of Fletcher's New Zealand operations. Fletcher is also selling its Formica and Roof Tile
businesses.
The company's shares recently traded at $6.99, down 0.1 percent in the first few minutes of trading today and have
fallen 3.8 percent this year.
ASX-listed Sims said in a separate statement the deal will immediately add to earnings in the 2019 financial year, with
group chief executive Alistair Field noting "the acquisition is consistent with a key strategy of disciplined growth
through complementary acquisitions in our core markets".
The joint venture operates nine recycling facilities, including two metal shredders, and employs more than 170 staff,
handling 350,000 tonnes of metal recycling a year.
(BusinessDesk)