Steel & Tube buys Manufacturing Suppliers

Petone-based Steel & Tube will pay $26m in cash and $6m in shares for Auckland-based MSL, which is best known for its Fortress Fasteners brand.

Steel & Tube Holdings, the country's biggest steel distribution company, has agreed to buy fastener maker Manufacturing Suppliers for $32 million in a cash and scrip deal.

The Petone-based company will pay $26 million in cash and $6 million in shares for Auckland-based MSL, which is best known for its Fortress Fasteners brand. Steel & Tube will keep the Fortress Fasteners brand and operate the business under the Manufacturing Suppliers name, it said in a statement.

"This is all about growing, innovating and competing in a rapidly changing market," Steel & Tube chief executive Dave Taylor said. "It will strengthen our offering in the fastenings space and reinforce our position as New Zealand's leading steel distribution company."

The acquisition is Steel & Tube's second in the past 15 months, after it bought Tata Steel (Australasia) for $28.1 million, which helped lift the company's first-half earnings 35 per cent.

The transaction is conditional on "normal pre-completion matters" and is expected to be completed in about six weeks. Steel & Tube didn't provide guidance on whether the acquisition will add to earnings.

Manufacturing Suppliers has eight branches across the country and employs 100 staff. It stocks more than 200 million items and has 10,000 product lines.

Steel & Tube shares last traded at $2.64, and have dropped 9.3 per cent this year.