JOHANNESBURG – Insimbi Industrial Holdings shares rose 4.76 percent to close at R1.10 on the JSE on Tuesday after the group said that the Competition Commission had approved its bid for scrap metals dealer Treppo approval without condition.
The group said the transaction would lift it out of the current economic downturn brought on by insufficient government spend on infrastructure and high tariffs imposed by the US in its ongoing trade impasse with China.
Insimbi, which supplies alloys to the steel sector and ceramic refractory linings to the cement, paper and pulp, steel and platinum industries, the acquisition would also help expand its ferrous business and its client base, enhance its access to raw materials for the purposes of beneficiation and gain access to an experienced management team and an international trading network.
The group, which is involved in the sourcing, trading and buying of recycled metals, last year announced the acquisition of scrap metal supplier Group Wreck for R120 million, which helped it grow interim revenue 13 percent to R2.4 billion in the year to end August. It said it remained on the lookout for further acquisitions as a defensive strategy, citing a lack of progress in government economic stimulus programmes as a challenge to its operating environment.
“Insimbi aims to exploit the synergies that exist between the two groups, which may include cost savings, improved margins, an expanded global and regional footprint and, most importantly, further diversification of Insimbi into a larger industrial conglomerate,” it said.