CWT

CWT: To lift trading halt at 9am on positive news. Co has acquired a 73.8% stake in MRI Trading, a Swiss based co marketing copper, zinc and other metals for smelting and processing customers internationally, essentially a metals trader. The consideration of US$94.0m will be paid with initial payment of US$60.8m upfront and remainder over 3 yrs…

MRI Trading has generated consistently over US$2.0b in rev and US$20m net profit. Its NAV is approx US$82.4m as of 30th June. The acquisition is approx over 6.4x P/E compared to CWT’s trailing P/E of 26.4x (stripping out sale proceeds of $147.6m in 2Q10) which is earnings accretive and still offers a strategic improvement to the logistics co in terms of vertical integration and network.