Cape Times

Transpaco acquires FPM group for R105m

- Roy Cokayne

TRANSPACO, the manufactur­er, recycler and distributo­r of plastic and paper-packaging products, has entered into an agreement to acquire the Future Packaging and Machinery Group (FPM) for R105 million.

FPM comprises Future Packaging and Machinery, Future Packaging and Machinery Cape and Future Packaging and Machinery KwaZuluNat­al.

It was establishe­d in the early 1990s and operates as a supplier of industrial and general packaging products, including the outsourcin­g of packaging services.

FPM markets its products nationally through three major distributi­on centres in Joburg, Cape Town and Durban and two smaller depots in Bloemfonte­in and Mbombela.

Transpaco said yesterday the transactio­n would be effective from February 28, but it was subject to terms and conditions.

It would be financing the transactio­n through a combinatio­n of existing facilities and cash resources, with the maximum estimated purchase considerat­ion dependent on the final values to be determined after the finalisati­on of FPM’s audited financial statements to end in February.

Transpaco added that the purchase considerat­ion for FPM included a premium of R37.2m to the book value of the net assets being acquired in terms of the transactio­n.

Explaining the rationale for the acquisitio­n, Transpaco said FPM had achieved consistent growth in sales and profitabil­ity since its inception and Transpaco was seeking to access the large customer base that FPM serviced, while its extensive product range would add to its offering.

Transpaco said FPM was an attractive target business prospect for the group to expand its business because it satisfied all the criteria in Transpaco’s expansion strategy.

These included a good track record of being highly profitable and cash generative; products and services that were well known and understood by Transpaco; an experience­d and self-sufficient management team, with the senior management having on average more than 30 years’ experience in the business; while the growth prospects were strong.

Transpaco said the acquisitio­n also had a number of attractive features and benefits for the group.

These included impressive distributi­on facilities, operating efficient packaging-supply services with sound standard operating procedures; scalable business model that allowed for significan­t growth through sales and marketing expansion, without excessive capital expenditur­e requiremen­ts; and anticipate­d earnings’ enhancemen­t.

Shares in Transpaco dropped 1.08 percent on the JSE yesterday to close at R22.

 ??  ?? A Transpaco production line. The company’s acquisitio­n provides great potential for it to grow the business.
A Transpaco production line. The company’s acquisitio­n provides great potential for it to grow the business.

Newspapers in English

Newspapers from South Africa