New Zealand’s Nuplex in asset sale talks with CHAMP PE

Nuplex said in a regulatory filing that it is holding discussions with the private equity firm, while stressing there are as yet no binding agreements. The company's New Zealand-listed stock jumped 7% on Wednesday in response to the news, although had slipped slightly as of morning trading on Thursday.

The assets that could be sold are Nuplex Specialties, which distributes raw materials, ingredients and specialty chemicals, and Masterbatch, a supplier of colors used in plastics. Nuplex has other divisions that produce resins and additives, composites, pulp and paper, and construction products.

The company reported a net profit of NZ$52 million ($41.5 million) for the 2014 financial year, up from NZ$45 million in 2013, while EBITDA was level at NZ$126 million. Revenue dropped to NZ$1.64 billion from NZ$1.67 billion. Nuplex said in its annual report that weaker than expected market conditions in Australia resulted in lower volumes and margins, but this was offset by earnings growth in Europe and Asia.

The company hopes to improve returns by boosting its emerging markets business. In 2014, 86% of Nuplex's EBITDA came from Asia, Europe and the Americas, up from 59% in 2010. Asia alone accounts for 18% of sales and 25% of EBITDA.

Both Nuplex Specialties and Masterbatch struggled in 2014, with EBITDA of NZ$14.2 million, down 44.3% year-on-year. The company blamed lower margins in the agency and distribution business as a result of pricing pressures within industry supply chains as well as reduced market share and volumes for Masterbatch.

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• Topics
• Buyouts
• Australasia
• Industrials
• New Zealand
• Australia
• CHAMP Private Equity
• buyout
• manufacturing