Vulcan Steel has signed a conditional sale and purchase agreement to acquire Ullrich Aluminium for NZ$165 million (A$148.63 million) to diversify into a metal that weighs just one-third as much as stainless steel. Vulcan gained 100 per cent of the aluminium distributor. Net debt of NZ$34 million and net tangible assets of NZ$131 million make up the transaction price. However, both are contingent on completing the accounts through July 31, 2022.
According to Rhys Jones, demand is growing because consumers are looking for lighter metals to minimise carbon emissions in transportation and industry. There is a worldwide movement to reduce emissions in aluminium manufacturing. He claimed that the weight of aluminium is nearly equal to that of steel.
“The acquisition of Ullrich significantly adds to the network reach and scale of Vulcan and supports our growth strategy to be the most customer service focused and efficient steel and metal products distributor and value-added processor in Australasia,” Vulcan CEO and Managing Director Rhys Jones.
Based in Perth, Ullrich Aluminium is a 60-year-old, family-run provider of aluminium with 43 sites in Australia and New Zealand. The transaction, according to Vulcan, would be entirely debt-funded. Rhys Jones also stated that Vulcan Ullrich Aluminium would be the new name for the operations.
Ullrich is a major industrial aluminium distributor with an extensive sales network and extrusion and fabrication facilities in Australasia. Ullrich reported sales of $215 million and $270 million for the fiscal years ending March 2021 and 2022, respectively, and EBITDA of $32 million and $49 million.
“The aluminium distribution market is an opportunity Vulcan has been considering for many years. Ullrich’s platform and network combined with Vulcan offer significant potential synergies. We are at the formative stage of our integration process and intend to provide more details on earnings and synergies with the release of Vulcan’s FY22 result on August 24,” added Rhys Jones.
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About two-thirds of Ullrich Aluminium's entire income comes from its activities in Australia. Additionally, Ullrich Aluminium has its trucking fleet to distribute goods to around 20,000 business clients. Similar delivery methods are used by Vulcan Steel, which uses its vehicles to serve approximately 12,000 clients.
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