Afrimat buys Cape Lime for R276m

AFRIMAT, the listed open-pit mining group and industrial minerals and construction materials supplier, has acquired lime and associated products producer Cape Lime for R276 million in its largest acquisition to date.

The acquisition is still subject to a due diligence process and approval by the competition authorities and Mineral Resources Department and includes Cape Lime’s operations at both Vredendal and Robertson in the Western Cape.

The purchase consideration is to be settled by a combination of cash and Afrimat shares. The sellers are the Sarel Pool Familie Trust, Gerhard Terblanche Familie Trust, Korum Trust and empowerment group Dormell Properties 428.

The current operational management of Cape Lime will remain in place after the finalisation of the transaction.

Andries van Heerden, the chief executive of Afrimat, said yesterday that the acquisition would complement and augment Afrimat’s industrial minerals product offering and further expand its footprint in South Africa.

Van Heerden added that the acquisition was an extension of Afrimat’s diversification strategy aimed at leveraging off the company’s core business, not only in new markets but also by offering new products in existing markets.

He said Afrimat had for the past few years made strategic acquisitions to diversify the group away from the traditional aggregates business and these acquisitions had ensured that the group had a more evenly distributed revenue stream and good margins across the business.

Although Afrimat was not a stranger to acquisitions, this was the largest acquisition the company had made to date but they were confident the quality of these assets, coupled with the marketing strength of Afrimat, would ensure the investment was quickly recuperated, he said.

“We are pleased to retain the expertise within the business. The company is well run and efficient and this makes integration into the Afrimat group of companies that much easier,” he said.

The roots of Cape Lime, which Afrimat said was known for the exceptional quality mineral products supplied to various niche markets such as manufacturing industries producing chemicals, filler, glass, paint and food products, dated back to 1946.

Van Heerden said Cape Lime’s products were also used for water purification, soil treatment, effluent treatment, building and construction.

“The mineral deposits are among the best quality of its kind in South Africa. The life of the remaining resources at both locations is in excess of 30 years. We are pleased to have Cape Lime in the Afrimat stable to enhance our portfolio of specialised products,” he said.

Apart from the two mines located in the Western Cape, Cape Lime has mining rights for a third mine but to date has not commenced with mining activities at this mine.

Afrimat shares rose 0.28 percent to close at R21.46.