enX CEO Paul Mansour
JSE-listed Industrial energy group enX has acquired Durban-based reseller and distributor of polymer, rubber, fillers and specialised chemicals West African International (WAI) for R250-million.
The acquisition of WAI, which also distributes oil lubricants produced by ExxonMobil to Caterpillar dealerships in Southern Africa and the Indian Ocean islands, was expected to bolster the size of enX’s Fuel and Chemical cluster and consolidate the Mobil distributorships of both businesses.
“Not only will it bolster our fuel and chemicals cluster, but the combination of our Mobil businesses will enable us to benefit from economies of scale, reduce per unit operating costs and generate revenue synergies,” said enX CEO Paul Mansour.
He added that enX was acquiring a strong, profitable and cash-generative business with an experienced management team and an established distribution platform that would allow it to introduce new products at little additional overhead.
WAI CEO Brent Hean pointed out that the deal would bring its chemicals business into a growing listed industrial platform.
“Management is taking a large part of the purchase consideration in enX shares, as we want to play a key part in growing enX. Bringing the lubricants businesses together gives us the scale we need to drive returns. We have also built a sub-Saharan African platform which we believe will give enX access to new distribution channels and customers,” he added.
enX would, after completion of the acquisition, hold an estimated 4% of the oil lubricants market share in South Africa.