Wesfarmers continues growth with $138m plastics buy

Wesfarmers Ltd has made its fourth acquisition in eight months with its chemical and fertiliser business, CSBP Ltd, striking a deal today to buy Victoria-based Australian Vinyls Corporation for $137.7 million.

The conglomerate, which is yet to complete a $22 billion takeover of supermarket giant Coles Group Ltd, has made four acquisitions totalling more than $1.3 billion since September.

It bought industrial supply company Bullivants in December after agreeing to pay $500 million for Linde Gas Ltd and paying $700 million for insurance broker OAMPS.

Australian Vinyls has a manufacturing plant at Laverton in Victoria and is the only manufacturer of PVC, or polyvinyl chloride.

It also imports PVC and makes decking and fencing products through its wood plastic composites business, ModWood.

CSBP Ltd managing director Keith Gordon said the proposed acquisition, expected to be tied up in September, represented an exciting growth opportunity.

"AV has a very strong position in the Australian PVC market and operates globally competitive manufacturing facilities," Mr Gordon said.

"The AV business model has many similarities to CSBP's other chemical activities in that it deals in a business to business market where high levels of customer service and product quality are critical."

AV is presently owned by a group of the company's senior management and Colonial First State Private Equity.

The full text of a company announcement is pasted below

Wesfarmers' chemical and fertiliser subsidiary, CSBP Limited, has entered into an agreement to acquire Australian Vinyls Corporation ("AV") for $137.7 million, with completion due to occur in September 2007.

AV is the only manufacturer of poly vinyl chloride ("PVC") in the Australian market with its manufacturing facility located at Laverton in Victoria. AV also imports PVC and related products to supplement local production and owns Australia's only manufacturer of wood plastic composites, ModWood, which manufactures products used in decking and fencing.

CSBP Limited's Managing Director, Keith Gordon, said the proposed acquisition was an exciting growth opportunity.

"AV has a very strong position in the Australian PVC market and operates globally competitive manufacturing facilities," he said.

"The AV business model has many similarities to CSBP's other chemical activities in that it deals in a business to business market where high levels of customer service and product quality are critical."

AV is currently owned by a group of the company's senior managers and Colonial First State Private Equity.