Johannesburg - Bidvest has decided to take another bite at Brandcorp, the distributor and reseller of industrial and consumer products.
The listed international services, trading and distribution group, which unbundled and separately listed its food services business on the JSE from the industrials unit last month, reported on Friday that it would be acquiring 100 percent of Brandcorp for an undisclosed amount.
Brandcorp is currently majority-owned and controlled by Ethos Private Equity. This is the second time Bidvest will be attempting to acquire Brandcorp from Ethos.
Bidvest in December 2012 announced that it had entered into an agreement with Ethos to acquire the entire issued share capital of Brandcorp for an undisclosed amount. The proposed transaction was subject to the fulfilment of certain conditions precedent by end-June 2013.
However, Bidvest reported in March 2014 that certain unspecified conditions precedent had not been met and the parties had mutually agreed not to proceed with the transaction.
Bidvest confirmed on Friday that the approval of the Competition Commission was the only condition precedent in the latest proposed transaction, which still had to be fulfilled.
Niche products
It said the proposed transaction would enable Bidvest to add various niche industrial and consumer products, including the much revered Cellini and other well-known brands, into its portfolio of existing services and offerings.
Brandcorp will form part of Bidvest’s Commercial Products (BCP) division, which trades in the industrial and consumer markets.
Lindsay Ralphs, the chief executive of Bidvest, said the transaction was in line with Bidvest’s continuing strategy of expanding through value accretive acquisitions.
“The acquisition of Brandcorp allows us to add scale to BCP, as well as accessing an existing client base that can be leveraged for synergies and other possible opportunities across the Bidvest group.
“Brandcorp brings strong, well-known and niche brands offerings into Bidvest, which are difficult to replicate in this market. There is a natural fit between our two companies as we have similar decentralised management operating models and in instances our product offerings and customer base is complementary,” he said.
Opportunities
Colin Datnow, the chief executive of the Brandcorp Group, said its management team were delighted with the transaction and excited at the prospect of being a part of the Bidvest Group.
“We see numerous growth opportunities for the Brandcorp business by way of enhancing our footprint and product offering and look forward to working closely with Bidvest in these endeavours,” he said.
Ethos partner Shaun Zagnoev said that during their partnership with Brandcorp they had been able to identify many attractive opportunities to create long-term value that was predominantly derived from earnings and revenue outperformance
.
Shares in Bidvest rose 3.43 percent on Friday to close at R132.50.
BUSINESS REPORT