Barloworld Limited - Barloworld to acquire Midas P
Barloworld Limited - Barloworld to acquire Midas Paints
Barloworld Limited
(Registration number 1918/000095/06)
JSE code: BAW
ISIN code: ZAE000026639
(`Barloworld`)
Barloworld to acquire Midas Paints
Diversified industrial company Barloworld Limited today announced it has signed
heads of agreement with the owners of Midas Paints (Pty) Limited trading as
Midas Earthcote to acquire the company for a cash consideration of approximately
R40 million.
The deal, which is subject to a due diligence process, and Competition authority
approval will see Midas become part of Barloworld`s South African coatings
operations.
Midas, which is privately owned has two main lines of business; its high-end
Earthcote range of wall coatings business with its 34 franchised concept stores
located in premium retail locations around South Africa and the Midas branded
paint range focused on the contractor market.
The acquisition, albeit small, will be earnings enhancing and the returns in the
business exceed Barloworld`s 8% real cash flow return on investment (CFROI)
hurdle rate.
Commenting on the deal, Barloworld Executive Director and CEO of Barloworld
Coatings Andre Lamprecht said:
`The Earthcote business, with its high-end brand and franchised concept stores
will fit well with our Plascon branded offerings. It will form part of our
strategy to provide consumers of premium quality wall coatings with a fully
integrated lifestyle offering.
The Midas brand is already well established in the Western Cape contracting
market and we believe it has enormous potential to expand into the rest of the
country. It could form a powerful platform for our further expansion into the
contractor arena and play an important role in our offering to clients such as
local authorities who require a contracting solution which has strong Black
Economic Empowerment credentials. This we will achieve through an enterprise
development strategy of partnership with contractors from previously
disadvantaged communities. Should the transaction be approved by the competition
authorities we intend creating a large number of painter learnerships which will
benefit not only the industry and our clients, but also society at large.`
Mike Vadas, CEO of Midas said, `We are delighted that the business we have built
is going to become part of Barloworld Coatings. As the coatings industry leaders
they have the scale and resources to build on what we have created as an
innovative challenger to the more traditional coatings brands and turn it into a
really powerful force shaping the future of the industry.`
Midas is to be run as a separate entity within Barloworld coatings, and existing
management and staff will be retained.
For further information contact Andre Lamprecht, CEO of Barloworld coatings on
+27 11 301 4600.
Sandton
1 September 2005
Sponsor
J.P. Morgan Equities
Date: 01/09/2005 07:05:08 AM
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