Hudaco Industries has signed an agreement to buy local plastic welding equipment importer and stockist Plasti-Weld for up to R56m, with the amount yet to be determined.
The Johannesburg-based firm, valued at about R4.9bn on the JSE, said on Thursday in a brief announcement it was looking to buy new businesses, to expand beyond the import and distribution of automotive, industrial and electronic consumable products in Southern Africa.
“The purchase of the Plasti-Weld business is consistent with Hudaco’s acquisition strategy and is an ideal fit for the engineering consumables segment of Hudaco as a bolt-on to its existing thermoplastic pipes and fittings business, Astore Keymak, which also sells plastic welding equipment,” it said.
“They will work together in exploiting synergies, optimising their route to market and expanding the combined customer base.”
Plasti-Weld, founded in 1991, is based in Benoni and employs 15 people. According to its website, it is the sole distributor of Leister, Ritmo and Buckleys products in SA.
The effective date of the transaction is December 1 and the amount of the deal will be based on Plasti-Weld’s annual profit in the past three financial years and the first one after the acquisition.
In August, the group announced it was acquiring the Brigit group for up to R315m to gain a foothold in the fire detection, containment and suppression market.
In its latest results, where it hit out at the government’s failure to repair crumbling infrastructure, create jobs and tackle rampant corruption, and for its stance on the war in Ukraine, Hudaco upped its interim dividend 8.3% year on year to 325c, while net profit grew 0.3% to R293m.
Headline earnings per share, a common profit measure in SA that excludes certain items, improved 8.1% to 926c, helped by the decrease in the number of shares as the company bought back R112m in shares.
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