New Zealand-based chemicals, transport and logistics firm DGL Group has announced two major acquisitions with the purchase of AdBlue manufacturer AUSblue along with Australian bulk liquid haulage specialist Shackell Transport.
Newly listed DGL operates a network of 486 sites across Australia and New Zealand and the AUSblue acquisition sees it expand into the automotive formulation industry.
AUSblue is a market leader in the manufacturing and distribution of AdBlue, a diesel exhaust fluid that removes harmful nitrous oxides and helps reduce emissions.
It currently produces over 50 million litres of AdBlue per year for 628 customers in the mining, transport and government sectors, as well as to major fuel retailers across Australia.
The company has a strong Australia-wide network, with seven manufacturing sites, and a fleet of ten bulk liquid transport vehicles.
The deal was valued at around $9 million which involved a cash payment of $2.2m and the issue of just over 4.5 million shares. Included in the acquisition price are transport vehicles and strategic property leases.
DGL says the acquisition will complement its existing AdBlue business in New Zealand and bring additional scale and capabilities to the chemical manufacturing division, enabling it to service large corporate customers across Australia and New Zealand.
DGL founder and chief executive Simon Henry says the acquisition is a “significant move” for his company which is aiming to diversify and broaden it service offerings across Australia and New Zealand.
“Acquiring the leading manufacturer and distributor of AdBlue gives us a significant foothold in the automotive industry, with access to almost all meaningful customers that require the formulation of this chemical.
“We also see a significant opportunity for our warehousing and distribution and environmental divisions to pick-up additional business from this acquisition,” he says.
Included in the acquisition price are transport vehicles and strategic property leases.
DGL says the assets will complement its portfolio and bring synergies to the group’s logistics with the opportunity to expand further into the automotive chemical sector.
“We are currently reviewing other companies in the sector, with the view to grow market share both organically and through acquisition,” Henry says.
Shackell Transport acquisition
DGL has also purchased Australian bulk liquid haulage specialist Shackell Transport.
DGL described it as a “favourable deal” valued at $8.9 million for both business and assets and equal to the asset value alone.
Shackell Transport has been operating for over 40 years, offering regional and interstate distribution and linehaul services across Australia to customers in the food, mining, chemical, agricultural, building and construction industries.
It’s the first acquisition for DGL’s warehousing and distribution division to complement existing fleet with the addition of 71 vehicles to the group.
The company says the deal will strengthen its chemicals distribution business and provide greater access to the bulk chemical industry.
Henry says the acquisition will benefit customers with additional services and capabilities.
“We are seeing more of our customers seeking efficiency in their supply chains and moving towards consolidating suppliers.
“By expanding our inter-state transport and bulk tanker fleet, we are cutting out the need for multiple suppliers, saving on transport costs and offering our customers all services in the sphere of chemical management,” he says.
Included in the acquisition price is Shackell Transport’s fleet consisting of 28 prime movers, 22 bulk liquid tankers and 31 trailers that cater for specialised products and services.
“Investing in quality equipment sets us up for the long-term and ensures we are able to keep up with the demand the industry requires,” Henry says.
“Expanding our inter-state transport fleet brings synergies between our three divisions and connects our Australia-wide network of facilities, giving us greater control over distribution and the customer service experience.”
The deal involved a $7.8m cash payment and the issue of more than 500,000 shares.
