KEY POINTS:
CER Group Ltd, which operates Certified Organics and direct marketing company New Zealand Nature, said it has agreed to buy the VRM (Vital Resource Management) Group in Australia for $A4.8 million ($NZ5.5m).
VRM is a privately owned sustainable environmental management company based in Townsville, Queensland. It manufactures and markets pro-biotic products used in water and soil treatment, sustainable farming, commercial and domestic cleaning.
The purchase will increase CER's profit by $A1m in the first year.
"The acquisition of VRM should be seen as a clear statement of intent from the CER Group," said David Warrick, managing director.
"We have committed to acquisition as a key component of our growth strategy and we are delighted to have identified a business of the quality of VRM that will both improve the group's overall profitability while offering the prospect of synergies with other of the Group's businesses."
VRM's current management team is staying.
The purchase price of $A4.8m is made up of $A750,000 in cash, the issue of $A1.5m worth of CER shares and the payment of $A1m cash 15 months after settlement. CER will assume approximately $A500,000 of liabilities.
The deal is subject to due diligence, and any shareholder consents.
Last week CER announced that its Certified Organics business has secured a $500,000 contract with the South Australian Government for the provision of its pine extract-based BioSeed Eradicator herbicide.
- NZPA
