WHAT DOES BB HAVE IN ITS SIGHTS?
AS AN INVESTMENT entity, BB Investment Company may not ring too many bells among market watchers, but the company – a little known 100% owned subsidiary of The Bidvest Group – is not exactly inconspicuous.
BB Investment Company is the vehicle through which Bidvest holds strategic stakes in waste management company EnviroServ Holdings (24,7%) and Tiger Wheels (19,5%).
But BB Investment Company also holds two very interesting investments in trucking group Cargo Carriers (where it holds a 9,5% stake) and in tourism and leisure group Cullinan (where it has a 10% stake).
Both Cargo and Cullinan are relatively small stakes (respectively worth around R20m and R40m) in relation to Bidvest’s array of service and light industrial interests.
But the presence of Bidvest – arguably one of the savviest corporates when it comes to making inspired investments – speaks volumes for the potential and prospects of both Cullinan and Cargo Carriers.
Whether Bidvest has bigger plans for Cargo Carriers and Cullinan is debatable. Bidvest is not known to aggressively build up its strategic stakes, though full buy-outs were initiated at McCarthy, Ifusion, Lithosaver and more recently Namsea.
Cullinan, which holds a diverse range of leisure and travel interests, would certainly complement Bidvest’s Travel services (Rennies, Harveys, Carlson Wagonlit etc). Bidvest does not really have a dedicated transport division, which means cargo carriers could bridge the gap between “mobile divisions” Bidvest Auto and BidFreight.
Perhaps the only hitch for Bidvest if it intends hauling Cargo Carriers and Cullinan aboard at some stage is that both companies are tightly controlled. Cullinan is 63,5% held by Travcorp Financial Services and Cargo Carriers is still firmly in the hands of the Bolton family.
One would assume that the major shareholders in both companies must be well aware of what efficiencies, synergies, financial muscle and strategic acumen Bidvest could bring to both businesses.
Bidvest, on the other hand, may be happy just to bide its time as a significant minority shareholder rather than resorting to any hostilities or persistent corporate pressure.
Bidvest executive David Cleasby plays down any strategic intent on Bidvest’s part in relation to either of the investments. “We’ve held these investments for a long time now…nothing has really changed about them.”
Still, it’s a situation worth watching.
Savvy investor. Brian Joffe