Metal recycling group CMA Corporation Limited (CMV) agreed to purchase UK-based Meretec Limited and its US-based subsidiary Meretec Corporation in exchange for about $18.5 million worth of its shares. CMA said Meretec would receive 37.5 million of its shares in, to be placed in escrow for 12 months.
Managing director Doug Rowe said the acquisition represented a significant new income stream and would contribute significantly to the group's earnings in coming years.
"We believe the environmentally friendly Meretec technology gives us that strategic advantage of having innovative recycling technology that adds real value to our metal-processing business," Mr Rowe said.
The Meretec technology removes the zinc before the steel is melted, thereby releasing two clean black scrap and 99% pure zinc powder.
"We have spent time considering the structure of the purchase and we are now confident all jurisdictional issues have been considered and this is an acquisition that will deliver great value to our shareholders."
CMA Corp said the documents were now signed with completion effective from 31 July 2008.
At 1533 AEST, CMA Corp was 0.5c at 48c.