IMPERIAL Holdings has reached an agreement to buy 100 percent of the J&J Group for an enterprise value of $300 million (about R4.4 billion) as it furthers its “Gateway to Africa” logistics solutions strategy.
The deal comes just as Imperial prepares to fall under new ownership following the R12.7bn cash bid by Dubai-based ports operator DP World Logistics to buy Imperial.
Imperial’s share price closed 0.8 percent higher at R61.80 on the JSE yesterday.
J&J does end-to-end logistics along the Beira and North-South corridor, specialising in break-bulk, containerised, project, fuel and out-of-gauge cargo transport between Mozambique, Zimbabwe, Zambia, South Africa, Malawi and the Democratic Republic of the Congo.
The acquisition would provide “scale in end-to-end cross-border transportation services in key African countries and new industries”, Imperial chief executive Mohammed Akoojee said yesterday.
Transport services included established routes on the Beira and NorthSouth corridors, port capabilities, a developed asset base including fleet and 45 000 square metres of warehousing space, and an entrenched customer portfolio, he said.
J&J’s asset base would complement Imperial’s asset-right focus and expand the group’s access to critical trade networks, consolidating Imperial’s leverage and reach on the African continent, he said.
The acquisition would also give Imperial access to new regions and corridors, as well as position Imperial for quicker go-to-market outside of South Africa, and would provide the group with end-to-end access to certain key countries and corridors (port to customer) in Africa.
The deal would be funded out of cash resources and existing debt facilities and would take place in three tranches, with Imperial initially acquiring 51 percent of the shares of J&J. This would be followed by second and third tranches of 46.5 percent and 2.5 percent respectively.
Carlyle and Ethos Private Equity, controlling shareholders of the J&J Group, said in a statement they were excited for J&J to partner with Imperial, and they believed the operations of the two businesses were very complementary.
J&J provided access to a management team that collectively had 95 years of industry experience in transportation services in complex African markets, using leading technologies, processes and systems.
In addition, J&J had implemented leading environmental, social and governance (ESG) practices in its key markets, which boded well for Imperial’s ESG aspirations.
The acquisition was subject to regulatory and other outstanding conditions.
BUSINESS REPORT ONLINE