New Zealand-based chemicals, transport and logistics firm DGL Group is purchasing Australian automotive chemicals company Austech in a deal worth around A$28 million.
Austech has been a developer of unique intellectual property for chemical formulations used in the automotive industry for more than 20 years.
It specialises in the manufacturing of non-oil automotive chemicals, such as coolant, brake fluids, solvents, flammables and aerosols.
DGL says it sees long term growth in the acquisition as more advanced fluids will be required for more sustainable vehicles.
The acquisition includes a cash payment of A$13m plus the issue of more than 5.3 million fully paid ordinary shares.
DGL recently dual-listed on the NZX and ASX and saw its shares trading at around A$2.80 upon the November 9 acquisition announcement.
Founder and chief executive Simon Henry says the deal will see DGL have a network of 51 facilities stretching from Darwin to Christchurch with a throughput of over 1.5 million tonnes per annum servicing over 2000 regular customers.
Austech adds to the already established Trans-Tasman presence of 30 chemical manufacturing sites across Australia and New Zealand. The company formulates over 12,000 tonnes of specialty chemicals per annum for its customer base, including major oil and retail blue chips.
DGL says it will work to enhance these relationships to develop a “strong network capable of delivering the chemicals of the future”.
Austech further enhances the capabilities of DGL’s chemical manufacturing division and a leading full-service chemical management company in Australia and New Zealand.
DGL says the acquisition provides “significant opportunities to attain additional business within the group”.
It follows other recent acquisitions of AdBlue manufacturer AUSblue along with Australian bulk liquid haulage specialist Shackell Transport.
