Compay Announcement - Industrial energy group enX today announced the first acquisition of its 2016 financial year, the purchase of West African International Proprietary Limited for R250 million. Durban-based WAI is a leading reseller and distributor of polymer, rubber, fillers and specialised chemicals. In addition, through the WAI subsidiary African Group Lubricants, WAI distributes Caterpillar oil lubricants, produced by ExxonMobil, to Caterpillar dealerships in Southern Africa and the Indian Ocean islands.

enX’s fuel and chemicals cluster was established in 2014 through the acquisition of Centlube. Shortly thereafter, Centlube began distributing Mobil oil lubricants. The acquisition will bolster the size of enX’s Fuel and Chemical cluster and consolidate the Mobil distributorships of both businesses. CEO Paul Mansour said there was a strong commercial rationale for the acquisition. “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,” he said. “On the chemicals side, we are acquiring a strong, profitable and cash-generative business with an experienced management team and an established distribution platform which will allow us to introduce new products at little additional overhead.”

WAI CEO Brent Hean said that “The deal will bring the 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.” 
After the acquisition, enX will have an estimated 4% of the oil lubricants market in South Africa, where the industry is dominated by the oil majors. The purchase will increase enX’s exposure to Sub-Saharan Africa, as approximately 20% of the combined volume of lubricants will be sold into the region.

Mansour said the WAI purchase would also open up new channels for acquisitive growth opportunities for enX in the chemicals space. “We continually look for attractive acquisitions to expand our business,” he said.