DGL Group snaps up the AUSblue Group


Purchase brings fleet and leading AdBlue supply position in Australia

DGL Group snaps up the AUSblue Group
An AUSblue road train

 

Trans-Tasman chemicals and logistics firm DGL has bought AUSblue Group, thereby expanding its AdBlue business locally.

The move by the specialist chemicals business that manufactures, transports, stores and processes chemicals and hazardous waste, sees it pick up the leading manufacturer and distributor of diesel exhaust fluid AdBlue, it said.

DGL counts it as a strengthening of its portfolio, with AUSblue currently producing more than 50 million litres of AdBlue a year for its 628 customers in the mining, transport and government sectors, as well as to major fuel retailers across Australia.

The company has a strong Australia-wide network, with seven manufacturing sites, and a fleet of 10 bulk-liquid transporters.

The acquisition will complement DGL’s existing AdBlue business in New Zealand and bring additional scale and capabilities to the chemical manufacturing division, enabling DGL to service large corporate customers across Australia and New Zealand.

 "I am pleased to announce the acquisition of AUSblue, which also marks our expansion into a completely new industry, the automotive formulation industry," DGL founder and CEO Simon Henry, said.

"This is a significant move for DGL, and one that is completely aligned to our growth strategy to diversify and broaden our service offerings across Australia and New Zealand.

"Acquiring the leading manufacturer and distributor of AdBlue gives us a significant foothold in the automotive industry, with access to almost all meaningful customers that require the formulation of this chemical.

"We also see a significant opportunity for our warehousing and distribution and environmental divisions to pick-up additional business from this acquisition."


Read how DGL listed on the ASX this year, here


Included in the acquisition price are transport vehicles and strategic property leases.

These assets are expected to bring synergies to the group’s logistics, which will bring efficiencies coupled with the opportunity to expand further into the automotive chemical sector.

Commenting on further expansion in the automotive formulation industry, Henry added: "We are currently reviewing other companies in the sector, with the view to grow market share both organically and through acquisition."

The acquisition price consists of:

  • a cash payment of $2.2 million
  • the issue of 4,539,470 fully paid ordinary DGL shares.

At the time the parties negotiated the conditional commercial terms in August 2021, the consideration represented a valuation of 2.5 times financial year 2021 normalised earnings before interest, tax, depreciation and amortisation (EBITDA), and based on the current market price of DGL shares, a valuation of 4.3 x FY21 normalised EBITDA.

Staff and management will be retained to continue to drive growth in the AUSblue business, as part of the broader DGL Group, the buyer said.

 

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