EnX to sell UK forklift business for £31m

Industrial, petrochemical and fleet management group enX has agreed to sell its UK forklift and container handling equipment business for £31m (R619m), having concluded it would monetise its investment at a higher valuation than is reflected in its share price.

enX provides branded capital equipment, power, fuel and chemical products to a broad range of economic sectors in SA, SubSaharan Africa, UK and Ireland.

The business, Impact Handling UK, is the exclusive distributor for Cat Lift Trucks and Konecranes heavy-duty forklifts and container handling equipment in the UK, and brought in about a fifth of the group’s R7.2bn in revenue in its year to end-August 2020.

Impact Handling is a standalone business in the UK with no shared operations or joint management between the Southern African industrial and materials handling business, enX said.

“As a result, the disposal of the business can be achieved without undue operational disruption or loss of economies of scale. The disposal consideration will strengthen the financial position of enX, ” the group said.

The sale is to a wholly owned subsidiary of French group Monnoyeur, the exclusive dealer of the Caterpillar brand in France, Belgium, Luxembourg, Poland, Romania and Algeria.

The sale, which is subject to conditions including shareholder approval, will include the profits of Impact Handling until the completion date, with a maximum consideration capped at £33m. The proceeds will be used to reduce debt, which stood at a total of R5.86bn at the end of August.

“The disposal represents an attractive opportunity for the company to monetise its investment at a valuation the board of directors of enX believes fairly reflects the future prospects and cash flows of the business,” enX said.

The disposal would also allow the group to realise its investment in Impact Handling at a valuation that it believes is higher than that incorporated in its share price. The value of the net assets of Impact Handling at the end of August was R552.2m.

enX’s share price was up 2.23% to R5.97, having halved over the past two years. This gave the group a market capitalisation of R1.08bn.