"Dualam is a strategic addition that significantly expands ZCL's depth and presence in the corrosion market," says Ven Côté, ZCL’s President and CEO. "Dualam is a very well respected company that has leveraged its reputation for quality and customer satisfaction to generate strong growth over the past number of years."
"As we have commented in the past, we believe there are significant opportunities in the corrosion market and with the addition of the strong team at Dualam we believe we are now in a position to grow our presence in this market," he adds.
Dualam operates eight facilities in Canada and the USA, providing custom engineered fibre reinforced plastic (FRP) and dual-laminate composite products for use in corrosion-resistant applications in the power generation, chemical, chloralkali, pulp and paper and other industrial sectors.
Dualam's two primary operating divisions are CPF Dualam and Troy Manufacturing.
ZCL’s core business is the manufacture and distribution of glass reinforced plastic composite liquid storage systems, including the manufacture of composite underground and above-ground tanks and related products.
Financial details
ZCL (TSX: ZCL) has entered into a share purchase agreement to acquire all of the issued and outstanding capital stock of Dualam effective 4 January 2010. The purchase price for Dualam is $20.5 million, subject to closing adjustments, including adjustments for working capital and certain post-closing vendor indemnities. The purchase agreement also contains earn-out provisions whereby the vendor can earn an additional $6.0 million over the first two years after acquisition, subject to a pre-defined formula.
For its fiscal year ended 30 November 2008, Dualam had consolidated revenue of nearly $44 million and EBITDA (earnings before interest, taxes, depreciation and amortisation) of approximately $4.5 million.
