22 Oct 2014

Nuplex sells two divisions

7:25 pm on 22 October 2014

Nuplex says it has sold its agency and distribution business, and its plastics additives operations, to a private equity-supported firm, for $A127.5 million.

Nuplex shares rose 12 cents, or about 4 percent, to $3.20 by the close of trade today.

The sale of Nuplex Specialties and Nuplex Masterbatch to Axieo, a company funded by CHAMP Private Equity, will leave Nuplex as a global resins supplier.

Nuplex flagged the possibility of such a sale last month and just the thought this might happen saw the shares rise.

Nuplex Specialties and Nuplex Masterbatch are essentially Australian and New Zealand-focused businesses, although less than 5 percent of the transaction involves Masterbatch's operations in Vietnam.

Nuplex's Australasian operations have been performing poorly and accounted for just 14 percent of total operating profit in the year ended June, down from 41 percent in 2010.

Nuplex said the businesses were sold at a premium but does at what price.

However, it said that, if the sale had occurred before the end of June, its gearing, or debt ratio, would be just 14.5 percent rather than the reported figure of just over 31 percent.

Nuplex said it expects most of the sale to be completed by the end of 2014.