Carbon Polymers Limited (CBP) has successfully acquired the assets and operations of Reclaim Industries Limited (RCM). The Board of CBP expects that the synergies between the operations of CBP and Reclaim will save $3‐5 million in costs per annum as well as generate organic sales growth for both businesses. Reclaim had revenues of $16 million for the past 12 months and had a forward order book valued at $7 million. Although Reclaim’s processing capacity was only 600 tonnes per month, it was very effective at maximising the value of its products. The national footprint of Reclaim will assist CBP’s ability to enter into national collection agreements with tyre retailers. The operations in Western Australia and South Australia will also be launching pads for increasing business with the vastly untapped mining sector.
Carbon Polymer’s spare plant capacity in Smithfield in Sydney’s west will immediately fill the product supply shortfall Reclaim has experienced and instantly relieves the additional costs it faced in supplementing its shortfalls. Due to the acquisition CBP will revise its plant roll out strategy.
CBP made a private placement of $2 million to fund the acquisition. The final purchase price was $925,000. After allowance for inventory, the net acquisition cost will be $525,000 for the three processing & recycling plants. This is against an estimated rollout cost for RCM of between $8‐9 million.
“This acquisition will add very substantial value for CBP shareholders,” said Mr Andrew Howard, managing director of Carbon Polymers. “This is highly synergistic and moves us much closer and more quickly to shareholder positive earnings and capital gains.”
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