DGL - DGL Group

[Sideshow Bob]

Buying Moar.........

DGL target sustainable vehicle market with Austech Chemical - NZX, New Zealand’s Exchange

DGL targets sustainable vehicle market with Austech Chemicals
Melbourne, Australia - DGL Group Limited (ASXGL) (NZXGC), (“DGL” or the “Company”), a specialist chemicals business that manufactures, transports, stores and processes chemicals and hazardous waste, today announced the strategic acquisition of Austech Chemicals Pty Ltd (“Austech”).

Over the last 20 years, Austech has successfully developed unique intellectual property for chemical formulations used in the automotive industry. Austech specialises in the manufacturing of non-oil automotive chemicals, such as coolant, brake fluids, solvents, flammables and aerosols. It is widely recognised that as Australia moves into more sustainable vehicles that more advanced fluids will be required, as such DGL sees this as a unique opportunity to access the sustainable vehicle market.
Founder and CEO of DGL, Simon Henry, said: “With the acquisition of Austech, DGL will now have a network of 51 facilities stretching from Darwin to Christchurch with a throughput of over 1.5 million MT per annum and servicing over 2,000 regular customers.”

Austech adds to the already established Trans-Tasman presence of 30 chemical manufacturing sites across Australia and New Zealand. Austech formulates over 12,000 MT of specialty chemicals per annum for its strong customer base, including major oil and retail blue chips. DGL will work to enhance these relationships to develop a strong network capable of delivering the chemicals of the future.

Austech further enhances the capabilities of DGL’s Chemical Manufacturing division reinforcing the company as the leading full-service chemical management company in Australia and New Zealand. Aligned with DGl’s cross-sell strategy, there are significant opportunities to attain additional business within the group.

The acquisition price consists of:
(a) a cash payment of $13M; and
(b) the issue of 5,306,122 fully paid ordinary shares in the capital of DGL. At the time the parties negotiated the conditional commercial terms in August 2021, the consideration represented a valuation of 5.2 x FY21 normalised EBITDA and based on the current market price of DGL shares, a valuation of 5.6 x FY21 normalised EBITDA.
Staff and management will be retained to continue to drive growth in the Austech business, as part of the broader DGL Group.

- ENDS -

[tango]

This is looking like a company with good prospects but the market don't seem to be too excited by the latest acquisition and the share dilution

This company is a little outside my expertise but I like what I am seeing so far. I am watch listing this for possible investment

[newbieinvestor]

Here is an interesting interview with Simon Henry by UoA Bus Dev department
https://www.youtube.com/watch?v=njtQEj6cchY

This is looking like a company with good prospects but the market don't seem to be too excited by the latest acquisition and the share dilution

This company is a little outside my expertise but I like what I am seeing so far. I am watch listing this for possible investment

[ThaiJohn]

Gettin a kickin these last few days. No news that I'm aware of.

[Muse]

Gettin a kickin these last few days. No news that I'm aware of.

It was inevitable and probably more to come over the next 12 months. The stock just massively bid up by momentum traders aided by the constant drip feed of acquisitions. Buyers just had no concept of the fundamentals they were buying into and the market still doesnt - no one has a clue what proforma PE or EBITDA multiples are and they still dont. Once statutory accounts start getting released people will realise its trading on massive multiples and even after the full year contribution from all the acquisitions kick in (in over a year) people will finally understand the true financial profile of the business and at current share prices it wont look pretty. Don't get me wrong great business, like the drive of management, and love the acquisition story - but market just got a bit loopy and it turned into a meme stock. Not advice - just my opinion

[FTG]

It was inevitable and probably more to come over the next 12 months. The stock just massively bid up by momentum traders aided by the constant drip feed of acquisitions. Buyers just had no concept of the fundamentals they were buying into and the market still doesnt - no one has a clue what proforma PE or EBITDA multiples are and they still dont. Once statutory accounts start getting released people will realise its trading on massive multiples and even after the full year contribution from all the acquisitions kick in (in over a year) people will finally understand the true financial profile of the business and at current share prices it wont look pretty. Don't get me wrong great business, like the drive of management, and love the acquisition story - but market just got a bit loopy and it turned into a meme stock. Not advice - just my opinion

Yes, DGL has gone on a total feeding frenzy since the IPO.

Successfully assimilating all these acquisitions into group will take a laser-like focus from the board & snr management. Certainly not impossible, but they certainly have their work cut out for a while!

[tango]

Here is an interesting interview with Simon Henry by UoA Bus Dev department
https://www.youtube.com/watch?v=njtQEj6cchY

Thanks for the link. I will watch and learn and also pop into the AGM this week

[tango]

DGC results are out
http://nzx-prod-s7fsd7f98s.s3-websit...033/360920.pdf

I'm still trying to understand the impact of acquisitions on the increase in revenue and EBIT

[ThaiJohn]

I'm really impressed by Simon Henry in tangos link. My sorta guy. No nonsense, results orientated and obviously very driven.

[newbieinvestor]

Thanks for the link. I will watch and learn and also pop into the AGM this week

No worries!...my pleasure that I chanced on that link which is quite impressive.. Simon was much more formal in this Annual presentation interview and it remains to be seen the impact of all the new acquisitions..