Steel & Tube to buy part of NZ Fasteners

Lower Hutt-based Steel & Tube Holdings announced today it had signed a conditional contract to buy a local stainless steel distributor.

Steel & Tube, the country's largest distributor of steel and steel products such as roofing, pipes, wire and metal fasteners, said it had conditionally agreed to buy New Zealand Fasteners Stainless Group (NZFSG) for about $11 million.

The price is subject to adjustment based on net assets of the business on April 3.

NZSFG employs 80 people at eight regional locations -- offering a chance to grow Steel & Tube's stainless steel arm, chief executive Nick Calavrias said.

The purchase, subject to due diligence, will be effective from April 3, although it is unlikely to contribute to bottom line earnings until the 2006/2007 financial year.

The takeover has provided a welcome distraction to last month's news that Steel & Tube's net after-tax profit fell 10.5 per cent in the six months to December 31, compared with the same period a year earlier.

Steel & Tube, half-owned by Australia's OneSteel, first listed on the New Zealand Stock Exchange in 1967 and is ranked in the top 30 companies by market capitalisation.

Shares in Steel & Tube -- which went ex dividend 15c today -- were at $4.04 just before midday, after selling between $5.55 and $3.80 over the last year.

- NZPA