Metal recycling group CMA Corporation Limited announced that it has entered into a conditional agreement to acquire UK based Meretec Limited.

Meretec Limited is the developer and owner of the de zincing technology that is currently used under license at CMA’s plants in Melbourne and Chicago. The patented Meretec Process recycles galvanized steel, removing and recovering the zinc coating from the metal to produce clean black steel and high grade zinc particulate.

Under the terms of the proposed acquisition, CMA would purchase 100% of the issued capital of Meretec Limited for a total purchase price of AUD 30 million. The acquisition will be settled through the issue of 37,500,000 fully paid ordinary shares in CMA Corporation Limited at an issue price of AUD 0.80 per share. The shares will be held under escrow for a two year period from their date of issue.

The acquisition is subject to satisfactory completion of due diligence, documentation and to any regulatory approval that may be required.

Mr Doug Rowe MD of CMA said that discussions were underway with a number of overseas companies in relation to licensing and joint venture proposals. He said that “The backing of CMA will take the Meretec business to a new level, allowing it to leverage our established international trading network and relationships. This transaction opens up abundant opportunities for us and we expect Meretec will become a very significant contributor to group earnings.”