Downer EDI to buy CPG from Temasek

SYDNEY: Downer EDI Ltd said it has agreed to buy CPG Corp Pty Ltd from Temasek Holdings Pty Ltd, significantly boosting its previous earnings outlook. 

In Singapore, Temasek said the total consideration for the sale of CPG Corp is S$131mil. 

As of end-March last year, CPG Corp's total net asset value was S$94mil, while its net fee income for the year was about S$181mli. 

The acquisition, representing an enterprise value to EBITDA multiple of three times, is expected to be settled by April 1, Downer EDI said in a statement. 

Downer EDI managing director Stephen Gillies said the acquisition will be earnings per share (EPS) positive from day one and will boost the company's previous earnings guidance of A$63mil in net profit for the 2003 financial year. 

“We now expect a significant uplift to the outlook advised in February,” he said. 

“The acquisition will increase our order book from A$5bil to A$5.5bil and will not have a material impact on gearing owing to continued strong operating cash flow and further disposals of non-core assets.” 

He said 2004 earnings are expected to be at least 15% higher than 2003. – AFX