Singapore and Australian water and waste water treatment business De.mem has agreed to acquired another company, this time a Western Australian specialty chemicals business that gives it access to a big mining industry client base.
The company will pay $5.1 million to buy Capic, a supplier of high margin specialty chemicals to companies including BHP Billiton, Northern Star, Pilbara Minerals and Iluka Resurces.
Products include corrosion inhibitors, process additives such as defoamers, viscosity modifiers and dewatering aids, reverse osmosis membrane antiscalants and cleaners, and cooling tower water treatment chemicals.
Having agreed on price a definitive agreement will be signed after a three month negotiation period.
Capic will also receive additional payments of up to $750,000 dependent on achieving sales improvement milestones over the next two years.
That the upper payment would be for a 60 per cent growth in sales, recognises De.mem’s track record of buying add-on businesses and boosting sales.
Its previous Australian purchase of Pumptech Tasmania saw increased cash receipts of 67 per cent in a similar time frame, while its new German subsidiary Geutec has increased cash receipts by 18 per cent.
For De.mem the purchase gives it increased scale, geographic diversification into WA, a complementary product range and cross-selling opportunities.
Capic’s founder will be paid partly in shares and become head of De.mem’s WA subsidiary.
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