Marley in $140m US purchase

BY WILLIAM GLEESON

Marley, the building products group, is spending $140m (£87.7m) to acquire Syroco, a US company that makes plastic furniture .

The purchase is to be financed partly by a one-for-six rights issue, which will raise £51.8m, with the rest funded by a bank loan.

Syroco's plastics technology, which is used in manufacturing garden and some indoor furniture, is similar to that used by Marley in its UK operations.

The move fits with Marley's strategy of concentrating on its plastics and automotive operations while withdrawing from concrete and clay building products businesses.

Syroco made an operating profit of $20.8m on a turnover of $95.5m in the year to December. Marley expects the full-year contribution in 1996 to be around the same level.

David Trapnell, chief executive, said that while in a full year the acquisition should enhance group earnings it might dilute earnings in the current year. Mr Trapnell said: "We have been saying for the last three years that our strategic direction will continue to be to develop our plastics business, particularly overseas. This is one such opportunity.

"It fits very well with our existing businesses in the US. They [Syroco] are in a growth market, and they are a leading player."

The financing arrangements for the American purchase mean that Marley's gearing is increasing to 43 per cent from 32 per cent. The company said that it was comfortable with this level.

Although Marley under chairman Sir George Russell reported a big improvement in performance in the year to December when it announced its results earlier this month, analysts have been concerned that the company will find it difficult to expand in the UK in current market conditions.

Pre-tax profit was £58.7m in 1994, a turnaround from a loss of £2m in the previous year. Turnover was £667m.

Plastic furniture sales are heavily dependent on the housing market, which is currently in the doldrums.

Syroco has manufacturing plants in New York, Arkansas and California. It sells to the public through warehouse clubs, catalogues and supermarket chains.

The news of the rights issue and the warning of a possible dilution of earnings this year sent Marley's share price down 11.5p to close at 122p yesterday.

The rights issue is being underwritten by SG Warburg and Credit Lyonnais Securities.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Business Development Executive / Sales - OTE £40,000

£18000 - £40000 per annum: Recruitment Genius: This fast growing Insurance Bro...

Guru Careers: Research Associate / Asset Management Research Analyst

£40 - 45k (DOE) + Benefits: Guru Careers: A Research Associate / Research Anal...

Ashdown Group: Finance Accountant - Financial Services - Central London

£30000 - £35000 per annum + benefits : Ashdown Group: Finance Accountant - Fin...

Ashdown Group: Chief Technology Officer (CTO) - Glasgow

£90000 - £98000 per annum + benefits : Ashdown Group: A truly exciting opportu...

Day In a Page

Solved after 200 years: the mysterious deaths of 3,000 soldiers from Napoleon's army

Solved after 200 years

The mysterious deaths of 3,000 soldiers from Napoleon's army
Every regional power has betrayed the Kurds so Turkish bombing is no surprise

Robert Fisk on the Turkey conflict

Every regional power has betrayed the Kurds so Turkish bombing is no surprise
Investigation into wreck of unidentified submarine found off the coast of Sweden

Sunken sub

Investigation underway into wreck of an unidentified submarine found off the coast of Sweden
Instagram and Facebook have 'totally changed' the way people buy clothes

Age of the selfie

Instagram and Facebook have 'totally changed' the way people buy clothes
Not so square: How BBC's Bloomsbury saga is sexing up the period drama

Not so square

How Virginia Woolf saga is sexing up the BBC period drama
Rio Olympics 2016: The seven teenagers still carrying a torch for our Games hopes

Still carrying the torch

The seven teenagers given our Olympic hopes
The West likes to think that 'civilisation' will defeat Isis, but history suggests otherwise

The West likes to think that 'civilisation' will defeat Isis...

...but history suggests otherwise
The bald truth: How one author's thinning hair made him a Wayne Rooney sympathiser

The bald truth

How thinning hair made me a Wayne Rooney sympathiser
Froome wins second Tour de France after triumphant ride into Paris with Team Sky

Tour de France 2015

Froome rides into Paris to win historic second Tour
Fifteen years ago, Concorde crashed, and a dream died. Today, the desire to travel faster than the speed of sound is growing once again

A new beginning for supersonic flight?

Concorde's successors are in the works 15 years on from the Paris crash
I would never quit Labour, says Liz Kendall

I would never quit party, says Liz Kendall

Latest on the Labour leadership contest
Froome seals second Tour de France victory

Never mind Pinot, it’s bubbly for Froome

Second Tour de France victory all but sealed
Oh really? How the 'lowest form of wit' makes people brighter and more creative

The uses of sarcasm

'Lowest form of wit' actually makes people brighter and more creative
A magazine editor with no vanity, and lots of flair

No vanity, but lots of flair

A tribute to the magazine editor Ingrid Sischy
Foraging: How the British rediscovered their taste for chasing after wild food

In praise of foraging

How the British rediscovered their taste for wild food