JSE-listed electrical wholesaler ARB Holdings has acquired electrical and lighting wholesaler Paragon Electrical Group (Paragon) for R30-million, the company said on Tuesday.

ARB said in a statement that the transaction would be funded from existing cash reserves.

“This is our first acquisition since listing in November 2007 and marks a significant milestone for the group. We have been assessing several acquisition opportunities for some time and Paragon was a natural fit for us due to its strong reputation, operational similarity and strategic geographic location,” said ARB CEO Byron Nichles.

The acquisition would extend ARB’s national footprint to 12 branches throughout South Africa.

“ARB will now have an immediate and well-established presence throughout the fast growing Pretoria and Centurion markets. In addition, these branches will serve as a base from which we are able to access and service the nearby, high growth regions of Witbank and Rustenburg.”

Paragon comprises five electrical wholesaling branches as well as a specialist cable trading division.

“ARB’s Johannesburg-based branch is focused primarily on the distribution of power cable and overhead line equipment and is the only branch within the ARB group which does not encompass a trade counter. The Paragon branches will provide ARB with access to ‘walk-in’ trade in the Gauteng region as each of Paragon’s five branches trade extensively over the counter,” said Nichles.

He noted that ARB’s black economic-empowerment status would allow Paragon to target local government, municipalities and parastatals in the greater Pretoria area.

“This acquisition would further enhance our buying power and allow us to provide a holistic electrical products supply solution to the extended group’s contracting, industrial and parastatal customers, through the combination of the complimentary focuses of ARB and Paragon. We will continue to focus on our strategy to grow the company’s footprint and product offering through careful consideration of value enhancing acquisitions,” said Nichles.

The transaction was conditional on Competition Commission approval. It would become effective in March 2010.

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