| Fri 2 Nov 2001, 0:00 | | Bridgestone Firestone Maxiprest In Merger & Acquis |
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BRIDGESTONE FIRESTONE MAXIPREST IN MERGER & ACQUISITION DEAL IN WESTERN CAPE
JOHANNESBURG - Southern Africa's predominant retreader, multi-brand new tyre
distributor and tyre management service provider, Bridgestone Firestone
Maxiprest Limited (Maxiprest), has announced details of its expansion in the
Western Cape, through the acquisition of the business of West Cape Bandag;
and the merger with four outlets of Prima Bande, forming Primax Tyres (Pty)
Ltd. Effective from 1 November 2001, Maxiprest will hold 51% of the equity
in Primax Tyres, and Prima Bande 49%.
The merger arrangement with tyre distributor and retreader, Prima Bande,
sees Maxiprest combine strengths with their outlets in George, Oudtshoorn,
Beaufort-West and Upington. These stores, which are already associated with
the Bridgestone Firestone tyre brands, will in future trade under the
`SupaQuick Maxiprest' name.
Incorporated under Primax Tyres (Pty) Ltd, the stores will in future also
distribute the range of Maxiprest retread and related tyre services. Where
SupaQuick focuses on tyres and underbody services for the passenger and
light commercial vehicle market, Maxiprest is a dominant supplier to the
truck and bus, agricultural and OTR new tyre and retread markets.
With Prima Bande's experience in the passenger market, these acquisitions
will broaden Maxiprest's product range from OTR to passenger vehicles in the
region. To transfer this trade knowledge to the region overall, Prima Bande
will retain the existing operational management, despite Maxiprest holding
control at 51%.
Rationalisation is limited to relocating the existing Maxiprest store in
Upington to the better profiled Supa Quick premises.
In addition to enhancing Maxiprest's 24-hour road breakdown service by
increasing its geographic presence, the acquisitions will lead to a larger
uptake of precured rubber, effecting greater volume related efficiencies.
Although the Primax Tyres stores will remain multi-branded, volume and
pricing advantages should also stimulate greater off-take in Bridgestone
Firestone tyres.
Maxiprest also acquired the business of West-Cape Bandag in a cash
transaction. Located in Montegue Gardens, the outlet has a large,
established industrial client base. To be renamed West-Cape Maxiprest, the
store will be incorporated into the Maxiprest branch network of 100 plus
retail outlets and 20 retread factories, and continue to focus on the
distribution and service provision to the truck and earthmover tyre market.
The acquisition and merger were concluded at an average PE of 3x, where the
ratio is indicative of tight trading conditions. These transactions will
enhance earnings for both Maxiprest and Prima Bande, based on greater
efficiencies and market presence.
The transactions are not expected to be earnings enhancing for Maxiprest in
the current year, but the earnings benefits will be realised in 2002 and
beyond.
ENDS
For more information, please contact:
Mr ME Davison
Joint-managing Director
Bridgestone Firestone Maxiprest Ltd
Tel : (011) 448-2255
Fax : (011) 448-2266
Email: info@maxiprest.co.za
