On behalf of my fellow Directors, it gives me great pleasure to invite you to read this Prospectus and to become a shareholder of DGL Group Limited (Company).
DGL is a well-established specialty chemicals and dangerous goods business offering solutions from manufacturing to recycling. DGL employs over 280 people and operates a network of 26 sites in Australia and New Zealand with approximately 140,000 tonnes of manufacturing capacity, 126,000 tonnes of chemical storage, and 174,000 tonnes of waste processing capacity.
The DGL business was founded by Simon Henry in 1999 and has established itself as a leader in the sector through a combination of organic growth and targeted acquisitions of business, property and other assets. DGL’s portfolio of assets and capabilities allows it to offer its customers a range of services across specialised chemical formulation and manufacturing, warehousing and distribution and waste management and recycling.
The Company’s vision is to leverage its capabilities, asset base and customer relationships to establish and provide a full-service solution for its customers through the chemical lifecycle. With the ever increasing demands on businesses across OH&S, environmental standards, and compliance requirements, customers have shown an increased demand for a total solution and ‘one-stop-shop’ for their chemical logistics and manufacturing needs.
During 2020, DGL served more than 1,300 pro forma customers (including customers acquired as part of its recent Chem Pack acquisition), across Australia and New Zealand from industries including agriculture, water treatment, mining, construction, automotive, food, pharmaceutical, lead smelters, plastic recyclers, galvanisers, manufacturing, home and garden, and chemical suppliers. DGL integrates deeply into its customers’ processes and workflows at multiple levels, resulting in loyal and long-tenured customer relationships.
DGL has delivered strong financial results over recent years. Total pro forma revenue was $180.1 million in FY20 and is forecast to increase to $209.7 million in FY22, representing a two-year CAGR of 7.9%. DGL’s pro forma consolidated EBITDA was $19.2 million in FY20 and is forecast to increase to $29.0 million in FY22, representing a two year CAGR of 22.9%. This has been underpinned by revenue growth and ongoing improvements in EBITDA margins.
We are at an exciting time for the business with growing demand for our services. With our highly specialised workforce, asset base, portfolio of licences, intellectual property and industrial expertise, the Company expects to continue its growth in the coming years.
The Offer will raise $100.0 million through the issue of 100.0 million new Shares at an Offer Price of $1.00 per Share. 9.8 million Shares will also be issued to the Chem Pack Vendors (or their nominees) at the Offer Price under the Vendor Offer as part payment of the deferred consideration payable for the acquisition of Chem Pack, which will be subject to a voluntary escrow period of up to 12 months from the Listing Date. The Company’s initial public offering and listing on the ASX will provide funding for ongoing growth and access to capital markets. DGL’s Founder and major shareholder, Simon Henry, will retain his entire shareholding and will hold 57.3% on Completion of the Offer, which will be subject to a two year voluntary escrow period from the Listing Date.
Detailed information about the Offer and the financial and operating performance of DGL is set out in this Prospectus. It also includes a description of the key risks associated with an investment in the Company in Section 5 which include, among others, business operating risks; environmental and OHS risks; weather patterns, climatic conditions and climate change; commodity prices; supplier arrangements and lack of formal contracts; reliance on customers and customer concentration; increasing competition; activity in the waste treatment sector; inability to meet forecast financial performance; and information technology and potential data breaches.
I encourage you to read this Prospectus carefully and in its entirety before making your investment decision.
On behalf of the Board and senior management team, I look forward to welcoming you as a Shareholder.
Yours sincerely,
Peter Lowe
Chairman
DGL Group Limited
