Hudaco Industries, an importer of automotive, industrial and electrical products, has acquired Flosolve, a specialist equipment supplier to the mining and industrial sectors.
The acquisition, effective June 1, will see Hudaco pay R45m upfront, with potential additional payments of up to R125m over the next three years, “depending on Flosolve’s profitability,” Hudaco said on Tuesday.
Flosolve employs 53 full-time staff members based in Gauteng and Middelburg and will become part of Hudaco’s engineering consumables segment. The acquisition will allow Hudaco and Flosolve to integrate their operations and expand their customer reach.
“The purchase of the Flosolve is consistent with Hudaco’s acquisition strategy and is an ideal fit for its engineering consumables segment,” the statement read.
Hudaco’s board of directors believed the acquisition would enhance the company’s position in the market and provide opportunities for growth and expansion.
While the transaction was below the JSE listing requirements’ threshold for a category 2 transaction, Hudaco’s board chose to volunteer the information to shareholders.
Hudaco Industries is structured into two main segments: consumer-related products, which include automotive aftermarket, power tools, security, and communication equipment; and engineering consumables, which supply mining and manufacturing customers with products such as power transmission, hydraulics, pneumatics and bearings.
Hudaco’s business model focuses on securing exclusive distribution rights from international manufacturers and providing technical support, product availability, and customer training.
The company operates through 29 subsidiary businesses, distributing a wide range of branded engineering and electronic consumable products, power tools, security equipment, automotive parts and mobile radio communication products.
Its customer base spans manufacturing, agriculture, mining, construction, automotive aftermarket, and security industries across Southern Africa.
The group has branches and independent distributors throughout SA, Namibia, Zambia and, more recently, Kenya.
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