Plastic pipeline manufacturer Crane Group Ltd. is buying Perth, Australia-based polyethylene pipe and fittings maker Kingston Bridge Engineering Pty. Ltd. for A$100 million (US$87.4 million).
Kingston Bridge merged with Crane's PVC and PE pipeline division, Iplex Pipelines. Kingston Bridge is Australia's only manufacturer and supplier of high-capacity, large-bore PE pipes wider than 40 inches and complete PE pipeline systems, including fittings, Crane Managing Director Greg Sedgwick said.
The sale came about after Sydney-based Crane approached Kingston Bridge a year ago, said Crane's financial director, Mark Fitzgerald.
Crane will also buy Kingston Bridge's sister company, Polymer Fusion Education Pty. Ltd., which trades as Polymer Fusion Technology. Polymer Fusion's laboratory, which is registered with the National Association of Testing Authorities, tests PE pipes, welded joints and sheet materials to ensure they meet Australian and international standards.
Crane manufactures and distributes nonferrous metal products and PE and PVC pipeline systems, and is a major distributor of plumbing and electrical supplies in Australasia. It operates in Australia and New Zealand.
Sales for its fiscal year ended June 30, 2006, were A$2 billion (US$1.49 billion).
Iplex Pipelines manufactures PVC and PE products in Australia, New Zealand and Singapore for applications including irrigation and plumbing, telecommunications, electrical, mining and industrial. It exports into Southeast Asia.
Kingston Bridge is Crane's fourth plastics manufacturing acquisition since 1997 and will enable Iplex Pipelines to expand further in Australia's eastern states. The acquisition also will consolidate Crane's position in the civil and infrastructure project markets in Queensland and western Australia, according to Sedgwick. And, it will give Iplex a leading market share in PE pipes and fittings in Australia, Sedgwick noted.
The deal is subject to approval by the Australian Competition & Consumer Commission. A Crane spokesperson would not say when the commission's decision is expected.
Crane said the acquisition will boost its after-tax profit for fiscal 2007 to A$53.7 million (US$47.3 million), a 14 percent increase over the company's 2006 financial year.