Orica Bids To Gain Icon Garden Sector Brands with Yates Business Purchase

16th September, 2003

Orica Limited today announced it had made an offer to acquire the Yates Limited ("Yates") Consumer Lawn and Garden Business for $45 million. This tops a previous offer of $41 million from The Scotts Company, of the US.

Orica’s offer is conditional on the Scotts’ deal not proceeding and Yates obtaining shareholder approval for the sale. A shareholder meeting is expected to be held in late October. If approved by Yates’ shareholders, the Orica acquisition is expected to be completed by the end of October, 2003.

The Yates business is the market leader in the garden care sector in Australia and New Zealand with icon brands including Yates, Hortico, Thrive, Dynamic Lifter, Waterwise and Nutricote. The business has annual sales of more than $100 million.

The acquisition would, if successful, form part of Orica’s Consumer Products business (OCP).

Orica Managing Director and CEO, Malcolm Broomhead, said the acquisition, if accepted by shareholders, would meet Orica’s financial targets and was strategically consistent with Orica’s growth principles based upon low-risk, value-adding acquisitions and supporting Orica’s best businesses.

"This acquisition would be a logical extension of Orica Consumer Products into the high growth garden care sector of the do-it-yourself business," he said. "These quality garden care brands would complement our existing portfolio of leading consumer product brands including Selleys, Dulux, Rota Cota, Cabot’s, Feast Watson, Berger and British Paints."

"Orica would generate value through the significant customer overlaps as well as supply chain, overhead and administration synergies."

Yates has been the market leader in the garden care sector in Australia and New Zealand since 1887 selling garden products primarily to the consumer market. Key products are seeds, plant foods (fertilisers), plant protection (herbicides, fungicides and pesticides), growing media (potting mix) and merchandise (pots).

Key Yates facilities are the Mt Druitt manufacturing and distribution centre in Western Sydney and the Wyee facility near Gosford in New South Wales. There are also smaller manufacturing plants at Pakenham in Victoria and Auckland and Montgomery Road in New Zealand. The business employs 270 people.