Reliance Worldwide Corporation (ASX:RWC)
has announced that it has entered into an agreement to acquire the business assets of LCL for approximately $37 million. Reliance Worldwide (RWC) aims to transform performance and efficiency for plumbing and heating, smart homes and specialist industries around the world.
LCL is one of Australia’s largest producers of high quality copper-based alloys and processes both new and recycled non-ferrous materials to produce a range of brass copper alloys. In addition to being the principal supplier of brass to RWC in Australia, LCL also recycles excess brass arising from RWC’s product manufacturing activities. RWC accounts for over 90 per cent of LCL’s revenues.
LCL’s primary production facility in Moorabbin is immediately adjacent to RWC’s brass forging operations. It is expected that most of LCL’s 65 employees, including key management and operations personnel, will join RWC on completion of the acquisition. Completion is expected to occur by 31 August 2021 and the final purchase price will be subject to working capital adjustments at completion.
RWC group chief executive officer Mr Heath Sharp, said: "The acquisition of LCL’s business assets means that RWC will continue to have access to the supply of high-quality brass to support its future operations. With this acquisition, RWC will secure a favourable long-term cost position for its brass rod requirements in Australia."
Shares in Reliance Worldwide Corporation (ASX:RWC)
are trading 0.1 per cent lower at $5.19.