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Metro Glass buys Australian Glass Group

NZ NewswireNZ Newswire 11/08/2016 Paul McBeth

Metro Performance Glass, which holds more than half of New Zealand's glass processing market, has made a move across the Tasman with the purchase of Australian Glass Group for $A43.1 million ($NZ45.7m).

The Auckland-based company has agreed to buy the third biggest glass processor in Victoria and New South Wales in a debt-funded acquisition to double the company's bank borrowings to about $100m, it announced to the NZX on Friday.

The deal is scheduled to settle by the end of this month and Metro Glass expects to incur short-term capital spending "in order to benefit from specific market opportunities" and to face one-off costs of $1m.

AGG's area of detached dwellings and alterations and additions have a relatively stable growth outlook, which coupled with the growth of double glazed windows and higher specification glass, provides an attractive market opportunity, chief executive Nigel Rigby says.

"Metro Glass produces significantly more double glazed units week to week than any other player in Australia or New Zealand and has developed considerable manufacturing and distribution core competencies, which combined with our expertise in processing high performance glass, will benefit the AGG business and its customers."

Metro Glass posted its maiden profit as a listed company in May, benefiting from increased construction activity even as supply shortages meant some work was slow to start.

AGG generated annual earnings before interest, tax, depreciation and amortisation of $A8m on $A45m of revenue, which Metro Glass expects will boost its own earnings from the first year.

The Victoria-based company is currently owned by the Trawalla Group, which manages an investment portfolio for Melbourne's Schwartz family.

Metro Glass shares last traded at $1.95 and have gained 13 per cent so far this year.

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