Bearing Man closes fastener deal
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Trade and Industry Editor
BEARING Man, one of SA`s largest bearings suppliers, will acquire Springset for R17m in a move that will enable the group to expand its share of the domestic fasteners market.
Bearing Man financial director Wayne Taylor said yesterday Springset, which imports and distributes products, would be merged with Bearing Man`s 18month-old fasteners division.
Together the new entity would have about 5% of the market for fasteners, which includes items like bolts, nuts and washers.
`The acquisition will enable us to leapfrog into the position we need to be in the short term,` Taylor said yesterday.
More importantly, he said, the group would be able to rapidly expand its market share following the acquisition, given Bearing Man`s large network of branches countrywide.
The acquisition of Springset, a subsidiary of the listed Dawn group, is subject to approval by the Competition Commission.
Bearing Man, which reported a 9% rise in earnings to R43,4m for the six months to September this week, was also advancing negotiations to sell 26% of the business to a black economic empowerment company.
Taylor said the group signed a memorandum of understanding with an unidentified party in July this year. Prior to the finalisation of the structure of the deal, however, both parties felt that a different structure would be more appropriate, he said.
The new structure was being thrashed out at the moment.
Bearing Man said on Monday that, in a tough trading environment, revenue for the six months to September had increased 4% to R517,4m. This was mainly due to volume growth, as the group was largely unable to effect price increases in the current low- inflation environment.
It said emphasis on good asset management had resulted in a positive cash flow of R43,8m for the period.
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