ASX-listed PaperlinX buys Canterbury Packaging for A$2M
By Paul McBeth
Aug. 6 (BusinessDesk) - ASX-listed PaperlinX will spend A$2 million expanding its New Zealand operations by acquiring 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 A$2.9 million, it said in a statement.
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," said Andy Preece, executive general manager for Australia, New Zealand and Asia.
"The additional packaging consumables will build on the existing strong market position of our profitable Spicers business in New Zealand," he said.
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, according to financial statements lodged with the Companies Office.
The Australian parent has been restructuring its business, warning shareholders it faced an annual loss of A$171 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, on top of earlier moves to divest its Italian and US businesses.
PaperlinX's 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 percent this year. The stock is rated an average 'hold' according to five analysts' recommendations compiled by Reuters, with a median target price of 8 cents per share.