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6th
June 2008
ORBITAL
EXPANDS INTO AUSTRALIAN ALTERNATIVE FUEL MARKET WITH NEW ACQUISITION
- Orbital
to acquire Tier 1 LPG fuel systems supplier, Boral Alternative
Fuel Systems.
- Approximately
A$1.6M acquisition cost, with transfer expected prior to 30 June
2008.
- Low-risk
entry to rapidly growing Australian and New Zealand alternative
fuel system markets.
- First
step in a broader initiative to offer 'next generation' greenhouse
friendly alternative fuel systems.
PERTH, AUSTRALIA - 6 June 2008 -
International clean energy technology group Orbital Corporation
Limited (ASX: OEC - "Orbital"), is pleased to announce
the addition to its existing portfolio through the acquisition of
leading Australian LPG fuel systems supplier, Boral Alternative
Fuel Systems ("BAFS").
BAFS is Australia's leading supplier of original
equipment LPG fuel systems and is a Tier One supplier to the global
automotive group, Ford Motor Corporation.
The acquisition provides Orbital with a low-risk
entry into the rapidly growing Australian and New Zealand alternative
fuel system markets, and represents a first step in a broader intent
to offer 'next generation' greenhouse friendly alternative fuel
systems that meet the requirements of fleet operators and private
buyers.
Under the terms of the acquisition agreement,
Orbital will make an investment of approximately $1.6 million to
assume BAFS's working capital (excluding debtors and creditors)
including a small component of goodwill. Subject to satisfaction
of all conditions precedent transfer of the business is expected
to occur prior to June 30th, 2008.
BAFS, which is based in Sydney NSW, currently
generates annual revenue of approximately A$6 million, and is expected
to be earnings per share accretive for Orbital from the date of
acquisition. Key management and operating personnel will transfer
across to Orbital with the business.
In summary, the BAFS business:
- assembles and distributes original equipment
products in Australia and New Zealand manufactured by Vialle,
a leading Netherlands-based international manufacturer of LPG
automotive fuel systems;
- sells LPG systems into the aftermarket for
retrofitting to existing vehicles;
- has over 20 years' experience in the LPG
systems supply business; and
- has access to Vialle's next generation,
greenhouse-friendly LPG systems.
Commenting on the acquisition, Orbital's CEO,
Dr Rod Houston, said, "We are very pleased to add the BAFS
LPG systems supply business to our portfolio, in keeping with our
strategy of growing and enhancing the Orbital business organically
and through targeted acquisitions. We expect BAFS to contribute
to the Orbital business in a similar way to our international Synerject
Joint Venture business, which generates a strong ongoing revenue
stream."
"There is a strong future for genuinely
greenhouse friendly LPG systems. The next generation LPG systems,
if properly implemented and supported, have the ability to deliver
significant reductions in greenhouse gas whilst retaining the economic
benefits of operating vehicles on LPG," Dr Houston continued.
"This is a first step in our overall
strategy to leverage our existing skills and know how and to grow
an alternative fuel systems business and develop strategic partnerships
with world class organisations such as Vialle. Orbital is well placed
to secure a significant position in the alternative fuels market,
where we see increasing opportunities as the price of oil continues
to rise significantly," he added.
Forward Looking Statements
This release includes forward-looking statements that involve risks
and uncertainties. These forward-looking statements are based upon
management's expectations and beliefs concerning future events.
Forward-looking statements are necessarily subject to risks, uncertainties
and other factors, many of which are outside the control of the
Company, that could cause actual results to differ materially from
such statements. Actual results and events may differ significantly
from those projected in the forward-looking statements as a result
of a number of factors including, but not limited to, those detailed
from time to time in the Company's Form 20-F filings with the US
Securities and Exchange Commission. Orbital makes no undertaking
to subsequently update or revise the forward-looking statements
made in this release to reflect events or circumstances after the
date of this release.
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