Burmah in pounds 32m lubricants deal: Share placing to pay for US acquisition from Zeneca

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The Independent Online
BURMAH Castrol, the lubricants, chemicals and fuels group, is consolidating its position in speciality industrial lubricants with a dollars 48.25m ( pounds 31.7m) acquisition from Zeneca, the drugs and agrochemicals arm of Imperial Chemical Industries.

California-based Tribol supplies a range of speciality greases and lubricants to customers in the mining, automotive, cement and steel industries - principally in the US and Germany. Pre-tax profits in 1992 were dollars 3.7m, after exceptional restructuring costs, on sales of dollars 53m. Its net assets at the end of December were dollars 21m and it has 300 staff.

It was acquired by ICI as part of Beatrice Chemical in 1985 but is no longer felt to be a core part of Zeneca, which is due to be demerged from the rest of ICI in June.

Burmah said the business complemented its existing operations and would make it the world leader in speciality lubricants.

The deal is being paid for through a placing of 4.5 million shares at 705p, arranged by Cazenove. Burmah's shares fell 16p to 732p.

Burmah's debt at the end of 1992 was pounds 370m, or 68 per cent of shareholders' funds, and some analysts were surprised that it decided to place shares for such a small acquisition. But the group said that previous small deals had been financed by a mixture of placings and debt. He added that he did not believe it would affect Burmah's ability to have a rights issue if required for future expansion.

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