Skellmax buys four and eyes even more

Donald Stewart, managing director of Skellmax Industries, says the company is eyeing bigger purchases. Picture / Martin Sykes

Skellmax Industries has gone on a $20 million spend-up, buying four companies in Australia, Britain and New Zealand, but says it's on the lookout for bigger acquisitions.

The company, which manufactures rubber products and supplies pumps mainly to the dairy industry, said yesterday that it had bought Wellington-based Thorndon Rubber, Auckland's Rubber Services and Melbourne-based Jenco Products. It also said it had agreed to buy a UK-based dairy industry manufacturer.

Skellmax managing director Donald Stewart said the purchases would "add significantly to the capabilities and intellectual property" of the group.

The businesses cost a combined total of about $20 million, which will be funded with bank debt, and are expected to contribute $17 million in revenue each year and $3.5 million to $4 million trading profit. The company has forecast trading profits of $24 million for the June 2005 year.

Stewart said the company was now eyeing "two or three" more acquisitions, each of which were larger than the combined value of those announced yesterday.

Skellmax shares closed 5c higher at $1.32 last night, a little short of their February high of $1.36 but just 15 per cent up on their $1.15 in June 2002 listing price.

Thorndon Rubber and Rubber Services provide the New Zealand and Australian print and manufacturing industries with a roller recovering service.

Jenco supplies above- and below-ground plumbing products and is complementary to Deks Industries, the company's main operating subsidiary in Australia.

Skellmax signed off on the Thorndon purchase at the beginning of July, the Rubber Services and Jenco purchases are effective today, while settlement of the UK deal is expected shortly.