Metrofile is in advanced talks with a single party that is looking to take over its business, having whittled down a number of approaches first announced about a month ago.
In late March, the document specialist group informed the market of a bid by an unnamed suitor to buy the company and had constituted an independent board to consider the offer, in a sign that the group is giving it serious consideration.
In a statement to investors on Tuesday, the group said it had “progressed discussions with a single party relating to the potential transaction and has agreed to permit such party to commence a high-level, limited due diligence.”
Due diligence in mergers and acquisitions is a crucial and comprehensive investigation conducted by a potential buyer to thoroughly examine a target company’s financials, legal standing, operations and overall business health before finalising a deal.
Shareholders were advised to continue to exercise caution when dealing in the company’s shares until a further announcement is made.
The group has been listed on the JSE since 1995, with empowerment partner Mineworkers Investment Company being one of its largest shareholders.
Valued at R1.1bn on the JSE, the group operates from 70 facilities and provides records and information management services in SA, Kenya, Botswana, Mozambique and the Middle East, with SA accounting for more than half its revenue.
It is not the first time Metrofile has been the subject of a takeover bid. When Covid-19 took hold of the global economy early in 2020, the group was in the middle of a takeover by US-based Housatonic Partners; the deal eventually fell through.
The company has been undergoing a strategic reset, looking to move its primary offerings towards nonpaper-based subscriptions while retaining its dominant position in paper-based storage in SA.
With Kabelo Khumalo
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