Austro Group Limited, the JSE-listed industrial group, today announced its first material acquisition since 2008 having concluded an agreement to acquire an effective 100% shareholding in Centlube Holdings Proprietary Limited. This R64 million acquisition, which could increase to R 80 million, becomes the foundation of Austro’s fuel cluster. The disclosed pro-forma financial effects of the transaction indicate that it is expected to have a beneficial financial impact on Austro, with Net Asset Value per share rising by approximately 4% to 98.8 cents and Headline Earnings per share for the half year to 28 February 2014 increasing by about 7%.

Austro is repositioning itself to focus on the energy sector, according to Paul Mansour, Austro Group chief executive, because; “energy is a significant economic segment which has exciting growth prospects in sub-Saharan Africa.” Austro already has a foothold in energy through its private power, temporary power and power distribution businesses which comprise its power cluster. Now, Centlube becomes the foundation of its fuel cluster.
Centlube is involved in the production and marketing of oil lubricants in sub-Saharan Africa. Based in Wadeville, Germiston, the company has a production capacity in excess of 12 million litres per annum. It is a licensee and distributor of ENI oil lubricants and also produces steel rolling fluids on behalf of Houghton PLC.

Austro will acquire Centlube for a total consideration of R64 million. This acquisition consideration will be increased by an additional payment of R16 million - from R64 million to R80 million - if Centlube is appointed by a global oil major and significant player in the lubricants industry as a distributor. The acquisition consideration of R64 million will be settled by the issue of approximately 21,9 million Austro shares and payment of R32,3 million in cash. Should the additional payment of R16 million become payable this will be settled 50% in Austro shares (issued at a 5% discount to the ruling market price at the date of issue) and the remaining R8 million in cash.

Mansour said; “Bringing Centlube into Austro gives us exposure to the fuel industry and increases our manufacturing footprint and potential to trade products into Sub-Saharan Africa. Ricophase Proprietary Limited, Austro’s largest shareholder, has held a stake in Centlube for more than two years. Together with the Hinckley family, the founding shareholders, they have taken the company from strength to strength. It now enters a new phase as part of a public company, which is likely to accelerate its growth”.

Ricophase, a 25% shareholder in Centlube, continues to show its commitment to Austro by taking Austro shares for its entire interest in Centlube. The remaining Centlube vendors who have received Austro shares may not trade their shares prior to April 2016.