Orica News Update

Submitted by Craig Strzelecki on 18 May, 2007 - 20:58

Orica has a restricted broker call and share price target from stockmarket analyst UBS. Potential acquisition of Dywidag-Systems International (DSI): Orica would be interested in DSI Mining Products: Orica has confirmed press commentary that it is currently evaluating whether or not to bid for DSI. The analysts believe Orica would be interested in buying DSI's mining products division because (1) it is highly complementary to Orica's Minova business, (2) there is significant industry and geographical overlap and (3) it would strengthen Orica's position as a global provider of mining services. Significant synergies between the two companies could be realised: They believe there would be significant synergy benefits that could be realised from combining DSI mining products with Orica's existing Minova division. Both businesses concentrate on providing stabilisation products and services to the underground mining industry and their products are highly complementary. With limited financial data we calculate the EV/EBIT multiple for DSI, including its construction and tunnelling business, to be 9.0x. This is based on the AFR's speculated bid price of E800m and their EBIT calculation of E90m. This compares to 9.2x EBIT which is the multiple Orica paid for Minova in October 2006.

Orica Limited is listed on the Australian Stock Exchange (ASX) under stock code ORI. You can view their investor website here. ORI was listed on the ASX on 28 November, 1961. Orica is the world's leading supplier of commercial explosives and is also the largest chemical company in Australia and New Zealand. It manufactures and supplies commercial explosives, industrial and specialty chemicals, decorative paints, and plastics. Orica has significant operations in Australia, New Zealand, South East Asia, North and Latin America. Orica Mining Services offers commercial explosives, initiating systems and Blast-Based Services to the mining, quarrying and construction industries. The business is run globally with a presence in Australia, Asia, Europe, the former Soviet Union, Africa, the Middle East, North America and Latin America. Orica Consumer Products is Australia and New Zealand’s leader in decorative, preparation, and lawn and garden care products. The business manufactures and markets icon brands including Dulux, Berger, British Paints, Levene, Walpamur, Cabot’s, Feast Watson, Intergrain, Acratex, Selleys, Rota Cota, Poly, Turtle Wax, Yates, Thrive, Zero and Dynamic Lifter in Australia and New Zealand. Chemnet is Australasia’s leading trading and distribution solutions business, servicing more than 40 key industries. The business is based in Australia and operates in New Zealand, China, Hong Kong, Fiji, Indonesia, Thailand, Malaysia, Singapore, Peru and Chile. Chemical Services is a major supplier of chemicals, services and technology to the water treatment, mining chemical and industrial chemical markets. The business is based in Australia and has operations in the United States and the United Kingdom. Donald Mercer is the Chairman of Orica and Graeme Liebelt is the CEO. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade ORI. Check your charts and good luck with your share trading!