Taiyo Nippon Sanso acquired the Australian LPG and industrial gas distributor Renegade Gas on July 31.

This marks the entrance of Taiyo Nippon Sanso into the Australian market. In addition, this is the first M&A involving an overseas company following the acquisition of Air Products Industry in Thailand in June. Expansion of business into a new overseas market is part of the Taiyo Nippon Sanso strategy to increase the overseas ratio of its total sales.

Taiyo Nippon Sanso and Renegade established a new holding company TNSC (Australia), respectively putting 85% and 15% of the capital. The acquisition was implemented through this new company.

Renegade has 17 locations in Eastern Australia which includes Sydney. Renegade is based in Inglenurn, NSW, which is a suburb of Sydney and has around 250 employees. Net sales are expected to reach AUD82 million (or JPY8 billion) for FY2015 ended in June of this year. LPG and other industrial gases account for 96% of total sales while sales and rental of gas related equipment account for 4%. LPG accounts for more than half of the sales of the gas business. As Renegade does not own a liquid gas plant cylinder supply is the main business for the company. According to Taiyo Nippon Sanso, Renegade holds a 10% share of the cylinder market in Eastern Australia.

The Australian GDP is the 12th largest in the world. Supported by what is a relatively high population growth rate (1-2%) among developed countries, steady economic growth is expected at around 3% a year for the time being with increases in personal spending and investment in housing.

Taiyo Nippon Sanso estimates the Australian industrial gas market to be valued at approximately JPY120 billion, and expects a new demand in the housing/infrastructure related and resources/energy related industries in this country. The company expects that the acquisition of Renegade Gas should lead it to an expansion of business in a new market.

Specifically Renegade will be expanding the marketing of medical gas and hardware including welding related equipment which have been handled by Leeden (Singapore), an affiliate of Taiyo Nippon Sanso. Renegade will eventually have its own liquid gas plant.