Trellidor hunts acquisition targets

Budget of up to R100m revealed in prelisting statement

TRELLIDOR was eyeing acquisition targets worth up to R100 million ahead of its JSE listing later this month, the company said in its prelisting statement released on Friday.

The company is looking to raise between R319m and R372m next week from the placement of 53.2 million shares before listing on October 28 in the building materials and fixtures sector.

The funds raised would be spent on the launch of a new product, as well as on acquisitions, Trellidor said.

“Trellidor sees the opportu- nity to accelerate growth by the introduction of further products, both developed in-house and through acquisitions.

“Value add to acquisition targets is possible through offering a national and African distribution network… as well as possible manufacturing synergies in Trellidor’s modern manufacturing facility in Durban,” the company said.

“The potential acquisitions that the company had identified, range up to R100m,” Trellidor said, adding that the company was aiming to buy companies in a price to earnings multiple of between five and eight.

“Significant capacity exists in certain lines to increase production without significant capital expenditure required,” Trellidor said.

Rising profit

The company reported an increase in profit during its latest financial year without giving reasons for the improvement.

The company increased its profit by 8 percent to R45.5m in the year to June compared with profit of R42.1m during the year to June last year, the company said.

However, revenue from continuing operations dropped by 0.5 percent to R294m from R295m in the previous year.

Basic and diluted earnings a share rose by 7.2 percent to 24.7c from 23.03c previously.

The company plans to pay 50 percent of its annual profit after tax as a dividend to the company’s shareholders.

In the year to June, Trellidor paid a total dividend to its shareholders of 23.66c, an increase of 6.6 percent from the previous year.

At the end of June, Trellidor had cash available of R15.4m, up from R11.2m at the end of June last year.

The company is expecting to achieve a market value of R675m at the time of listing.

The manufacturer of security barriers has a network of 72 franchises in South Africa.

Trellidor is represented in 23 countries worldwide including distributors in 17 African countries. The company also operates an assembly plant in Ghana.

The group estimated the size of the South African custom-made barrier security market at about 300 000 units and R900m a year.

“The company estimates that it has approximately 35 percent market share in the main urban centres in South Africa, while it enjoys an estimated market share of approximately 50 percent in outlying areas of the country,” it said.