Brick and coal group Brikor, which only regained its JSE listing in July after a seven-year suspension, has taken up a 40% shareholding in transport company Zingaro Holdings.
On Wednesday, Brikor — which is a supplier of building and construction materials, and also mines clay and coal — said it has acquired the stake in Zingaro, a business that provides multi-product road transportation services for bulk commodities, for R50m.
The acquisition comes after the group said in 2020 that it is focusing on expansion and improving its BEE credentials as its financial position improves. Though the group swung into an interim loss as Covid-19 hit the construction sector, it said its risk profile has improved as it pays down its remaining debts, and it wants to expand its local footprint.
Zingaro also specialises in providing turnkey services for mine activities, such as loading, hauling, stockpile management and haul road maintenance by using a wide range of specialised trucks and earth-moving equipment. The company primarily operates in SA, mainly servicing short- to medium-distance routes in Gauteng, North West, Mpumalanga and Limpopo, with a fleet of more than 100 specialised vehicles.
Brikor said the deal will help grow its income and its entry to the market with a large market share.
In a statement, Garnett Parkin, Brikor CEO, said Zingaro is “well-positioned with substantial market share”. He also sees “many synergies” between the two companies, adding that “the Brikor board of directors believes it will ensure additional income and profit opportunities for the combined group”.
Parkin says Zingaro “has shown exceptional growth” of about 20% per annum since 2013, with growth in revenue of 111% for the financial years 2016 and 2017. During the following financial year, revenue increased by 42.5%. Revenue growth is expected to show an increase of between 8% and 9% annually for the foreseeable future.
Brikor has an option until the end of April 2023 to buy the remaining 60% in Zingaro for R90m in exchange for Brikor shares at an issue price of 15c per share.
Brikor was suspended from the JSE in July 2013 after entering provisional liquidation. It emerged from this in October 2015.
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