Johannesburg - Banking and financial services group Sasfin yesterday announced it was selling 70 percent of its logistics business, Sasfin Premier Logistics Proprietary, to Imperial Holdings for an undisclosed amount.
The group said Sasfin Premier Logistics would be renamed Imperial Sasfin Logistics as part of the deal.
It said the transaction would allow Imperial Sasfin Logistics and Imperial Logistics Proprietary – a wholly-owned subsidiary of Imperial – to join forces and offer end-to-end import and export solutions.
Sasfin chief executive Roland Sassoon said the new entity would add to Imperial’s capacity in warehousing, distribution and transport, and business experience and expertise in Africa and elsewhere. Sassoon said the new venture would also harnesses the vast infrastructure of Imperial, and trade finance and foreign exchange (FX) infrastructure of Sasfin, offering clients a complete door-to-door service.
“This, combined with Sasfin’s complementary lending and trade solutions to clients, including trade and debtor finance, FX execution and advisory services, makes Imperial Sasfin Logistics arguably the most all-encompassing one-stop solution for clients involved in importing and exporting product,” Sassoon said. “We are confident our skills, experience and capability will see the emergence of a formidable new player in South Africa’s market.”
During the interim results presentation in March, Sasfin said the commercial division was impacted by the economic downturn and it endured tough trading conditions during the period, particularly in its incentives and freight businesses.
Profitability declined by 3 percent to R12.32 million from R12.70m in 2014. However, its total income for the interim period to December increased 19 percent to R568.3m.
The group also announced at the time that it had acquired 100 percent of Fintech’s shares and voting rights.
It said the acquisition was expected to provide the group with an increased share of the asset rental finance market through access to Fintech’s supplier base.
Sasfin said the transaction value was below the threshold required for categorisation in terms of the JSE’s listings requirements.
Peter Takaendesa, a portfolio manager at Mergence Investment Managers, said that although the transaction was small, it would strengthen the competitive position of the combined entity over the long term. “Sasfin Premier Logistics is experiencing tough trading conditions… and will benefit from leveraging Imperial’s much larger footprint.
“Imperial Logistics is effectively vertically integrating to provide an end-to-end service to its customers and the transaction is in line with the group’s stated strategy of diversifying its earnings away from the more cyclical automotive wholesale (Kia/Hyundai imports) and auto dealerships.”
Sasfin’s shares rose 7.18 percent yesterday to close at R59.
BUSINESS REPORT