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May 30, 2023

Axieo pays $127.5m for Nuplex plastics unit

Axieo, a CHAMP Private Equity-backed company, will buy Nuplex’s agency and distribution and business and plastic additives unit Masterbatch for a combined $127.5 million. Axieo chief executive Sam

Axieo, a CHAMP Private Equity-backed company, will buy Nuplex’s agency and distribution and business and plastic additives unit Masterbatch for a combined $127.5 million.

Axieo chief executive Sam Bastounas said he will invest in better systems, new staff and possibly further acquisitions after Axieo snapped up Nuplex’s distribution and plastic additives businesses for a combined $127.5 million.

After the deal was announced on Wednesday Mr Bastounas said that Axieo, which is backed by CHAMP Private Equity, will be a net employer and invest more capital in the businesses.

“It is a great group of people with a great product. Its position is excellent [ but] it certainly requires some love...we do require some capex to get running more efficiently," he said. “The first port of call will be to expand positions with existing customers and then maybe look to acquisitions. We are open to transformational acquisitions but tuck-ins are obviously lower risk."

Nuplex managing director Emery Severin. Photo: Nic Walker

The Nuplex Masterbatch business makes colour and performance additives for plastics used in construction materials, pipes and packaging.

Nuplex Specialties is a selling agent and distributor of food and nutrition products, adhesives, coatings, and chemicals and rubber materials.

The two businesses had combined revenue of $NZ280 million and earnings of $NZ14 million in 2013-14.

After Street Talk first broke news of the deal talks in September, Deutsche Bank estimated the two businesses would be worth between $NZ55 million and $NZ100 million based on a multiple of four to seven times earnings.

Nuplex was not shopping around for buyers but the Masterbatch and Specialty businesses were not core to its strategy. The company will use the proceeds to pay down debt and refocus on its primary global resins business.

Nuplex may use leftover funds to pursue growth in emerging markets, increase its research and development or to return capital to shareholders.

Mr Bastounas, a former Nuplex executive, said he started considering the deal late last year when Nuplex was struggling. He took counsel from corporate advisers Gresham before taking his pitch to CHAMP.

Nuplex was advised by Greenhill and Allens. Nuplex shares, which are listed in Australia and New Zealand, rose 2¢ to $2.76 on Wednesday.

CHAMP managing director Cameron Buchanan said a clear plan has been developed to drive growth organically and through industry consolidation. Axieo intends to expand further into Asia by using its base in Vietnam as a springboard.

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