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Skellmax acquires Gulf Rubber

Skellmax acquires Gulf Rubber in Australia and New Zealand

Skellmax Industries Limited (SKX) has agreed unconditionally to purchase the Australian and New Zealand businesses of Gulf Rubber effective from 1 February 2006.

Based in Sydney, Gulf Rubber (Gulf) commands a worldwide market niche in the design and manufacture of highly technical rubber and associated polymer products. Gulf has sales, research & development and some manufacturing operations in Australia and New Zealand with most manufacturing being carried out in Asia under contract.
Gulf’s key markets include automotive, appliance, medical, construction, mining, valve control and irrigation industries.

Skellmax Managing Director Donald Stewart says the purchase complements the existing businesses and fits with the company’s strategy to grow its international presence and maximize the benefits of Asia based manufacturing.

“Gulf provides Skellmax with access to new markets in the medical, appliance and specialist niche automotive sectors. It also opens the doors to new multi-national customers.

Exports to Asia, Europe and North America account for approximately 20 per cent of Gulf’s sales.

The purchase price will total NZ$32 million, comprising an initial cash payment of NZ$21 million plus the issue of SKX shares to the aggregate value of NZ$5 million calculated at the recent average market price and a deferred cash payment of NZ$6 million for twelve months.

The cash amount of the purchase will be funded from existing credit lines.

The Gulf group has shown growth in earnings before interest, tax, depreciation and amortisation (EBITDA) in recent years and is expected to deliver EBITDA of NZ$5.6 million for its 2006 financial year from projected Revenues of approx NZ$35m.

Skellmax anticipates being able to provide updated earnings guidance when it releases its results for the six months to 31 December 2005 on Wednesday 8 February 2006.

Like Skellmax, Gulf benefits from a dedicated staff including experienced chemists and rubber technologists, Mr Stewart says.

“Gulf’s technically advanced research and development team provides Skellmax with access to expertise in high-spec and extremely fine tolerance rubber production techniques including rubber bonding to metal and plastic.

“This can be leveraged across Skellmax’s businesses to convert existing opportunities and explore growth outside our current level of expertise.”

“Gulf will be able to take advantage of Skellmax’s marketing bases already established in Europe and North America. ”

Gulf will continue to operate as a stand alone entity with its existing management and skill base, Mr Stewart says.

Skellmax Industries Limited is a New Zealand based marketer, manufacturer, distributor and exporter of rubber and foam products, footwear and vacuum pumps to agricultural and industrial customers. It is listed on the New Zealand Exchange under the code SKX.

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