BrazIronLtd. said April 27 that it has entered into a conditional agreementto acquire an 80% interest in privately owned Safety Barriers WA Pty. Ltd., aroad safety barrier maker in Western Australia.
The company intends to diversify its operations in responseto the global downturn in the commodities sector.
The agreement values Safety Barriers at A$6.3 million, andBrazIron will initially pay A$2 million for an initial 32% stake.
A further A$2 million payment within the next six monthswill secure another 32% of Safety Barriers. The remaining 16% can be acquiredat the end of the third financial year by paying 3x EBITDA of Safety Barriersthat year.
BrazIron will also submit an application to the ASX tocancel its listing and revert to a private company, subject to shareholderapproval.
If shareholders approve both the acquisition and thedelisting, BrazIron plans to offer a 10% buyback of securities on issue,totaling up to 83,508,111 shares, using company funds. The buyback is capped atA$420,000.