JSE-listed Hudaco will acquire the trading assets and liabilities of specialist plastic equipment importer Plasti-Weld Business from December 1 for a maximum of R56-million, which will be funded from cash generation and existing facilities of Hudaco.
Hudaco specialises in the importation and distribution of selected high-quality branded automotive, industrial and electronic consumable products, mainly in the Southern African region. One of its key strategies is to acquire new businesses in similar fields of activity when the opportunity arises.
Plasti-Weld is an importer and stockist of plastic welding equipment, hot-air tools, specialised test and inspection equipment and thermo cutters. It also manufactures plastic welding rod and employs 15 staff, all based in Gauteng.
The purchase consideration will be based on the annual profit after tax of the Plasti-Weld Business for the three preceding financial years and the first year after the effective date.
"The purchase of the Plasti-Weld Business is consistent with Hudaco's acquisition strategy and is an ideal fit for the engineering consumables segment of Hudaco, as a bolt-on to its existing thermoplastic pipes and fittings business Astore Keymak which also sells plastic welding equipment.
"They will work together in exploiting synergies, optimising their route to market and expanding the combined customer base. Hudaco will be able to use its experience and expertise in value-added distribution to enhance the position of the Plasti-Weld Business, resulting in long-term benefits to shareholders," Hudaco said.