West Perth-based Straits Resources Ltd has purchased metal products distributor Varomet, to be paid for in cash and a scrip issue, the company announced today.
The full text of a company announcement is pasted below
Straits Resources Ltd is pleased to announce that it has purchased Varomet, an international metal distribution business.
Varomet maintains a global reputation as a reliable distributor, marketer and offtaker for a wide variety of metal and noble alloy products. Varomet has an extensive network of highly experienced employees and has established operations and representative offices in most major metals distribution centres around the globe.
Straits' Chief Executive Officer, Mr Milan Jerkovic, said "the acquisition will compliment both Straits existing business and Straits Global Trading, the commodities marketing arm and subsidiary of Straits Asia Resources Limited which focuses on bulk commodities".
Varomet globally sources non- ferrous metals and noble alloys primarily from producers for distribution to a significant international client base. Varomet focuses on providing its clients with reliable quality of product, logistics services and price management.
Varomet manages all facets of marketing and distribution including financing material from producer to consumers. Varomet has in place financing facilities with mainstream commodity institutions.
Mr Jerkovic said "From a financial standpoint the business is very profitable with 2007 earnings expected to be in excess of US$10 million based on current trading volumes".
The consideration for the business is payable in both cash and shares in Straits.
