| Wed 23 Jun 2010, 14:01 | | HDC - Hudaco - Press Release/Hudaco acquires Filter and Hose Solutions (Pty) Ltd |
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HDC
HDC
HDC - Hudaco - Press Release/Hudaco acquires Filter and Hose Solutions (Pty) Ltd
HUDACO INDUSTRIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1985/004617/06)
Share code: HDC & ISIN: ZAE000003273
("Hudaco")
Press Release
Hudaco acquires Filter and Hose Solutions (Pty) Ltd
Hudaco Industries Limited today announced the acquisition of Filter and Hose
Solutions (Pty) Ltd (FHS), a leading distributor of filter products, effective
from 1 September 2010.
Hudaco is a JSE listed company specialising in the importation and distribution
of selected high quality engineered and security products in the southern
African region, with the replacement market as a particular focus. Brands
distributed include FAG ball bearings, Deutz diesel engines, Makita power tools
and DSC intruder alarm equipment. The main market sectors serviced by Hudaco
include the mining and manufacturing industries as well as the wholesale trade
and security equipment installers. It has turnover of R2.4 billion and 2300
employees.
FHS imports, purchases and distributes quality branded filter products used in
open cast mining and other earthmoving equipment in South and southern Africa.
The main brands sold by FHS include Donaldson filtration products and Malcorp
industrial hose. These suppliers have agreed to renew their distribution
agreements with FHS following the transaction. FHS has grown significantly over
the past few years following the merger of Francol, First Filtration and Filter
Flow 5 years ago. Based in Boksburg, in Gauteng, the business employs 110 people
and generates sales of R220 million per annum.
Hudaco Chief Executive Stephen Connelly commented: "At our results announcement
in January we reaffirmed our commitment to growth through acquisition and are
pleased to announce the acquisition of a business that is an ideal fit for
Hudaco in that it focuses on selling branded consumables to the
engineering/mining aftermarket, an area of core competency for Hudaco. Once
integrated into the group we believe synergies will emerge which, together with
Hudaco`s considerable experience in the distribution of branded consumables,
will enhance FHS`s market position, resulting in long term benefits to
shareholders."
The business is being purchased for a consideration of 7 times the average PAT
over the next three years (subject to a maximum price of R350 million) which
will be paid out of Hudaco`s existing cash resources. The current management,
all of whom are currently shareholders, have agreed to remain in the employ of
FHS at least during the earn-out period. The transaction is conditional on the
approval by the Competition Commission and the completion of a satisfactory due
diligence.
Issued by: Hudaco Industries Limited
Hudaco contacts: Stephen Connelly (Chief Executive)
Tel: (011) 345 8201
23 June 2010
Investment bank and sponsor
Nedbank Capital
Date: 23/06/2010 14:01:01 Produced by the JSE SENS Department.
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