Crane Group Limited announced it had entered into an agreement to acquire 100% of the shares in Kingston Bridge Engineering Pty Ltd (KBE), a leading plastic pipe and fittings manufacturer based in Western Australia, for approximately A$100 million. As part of the transaction Crane will also acquire all the shares in KBE’s sister company Polymer Fusion Education Pty Ltd. The acquisition is subject to there being no objection from the ACCC.
The acquisition of KBE will add further scale and breadth to Crane’s Iplex Pipelines business, its largest division, delivering a new capability in large bore polyethylene pipe and fittings. This is consistent with Crane’s objective to consolidate its position in the design and manufacture of pipeline products for the growing irrigation, water, civil and construction markets in Australia.
The acquisition will also provide plant, equipment and warehousing capacity for further expansion of polyethylene pipe and fittings on the eastern seaboard of Australia. The purchase price represents a seven and a half times EBIT multiple based on earnings for the 2007 financial year and the acquisition is expected to be earnings accretive in the first full year.
The acquisition will be partly funded by an institutional placement to raise A$60 million of ordinary equity.