Tedelex, a subsidiary of JSE-listed Amalgamated Appliance (Amap), has bought television and satellite equipment manufacturer Sanmeg Satellite for R53-million in a deal that will enable Amap to introduce new brands into its portfolio. It should also help the business with its expansion into Africa.
Bruce Drummond, the chief financial officer at Amap, said yesterday that the deal would assist the group with its drive outside South Africa, particularly with the high demand for satellite decoders in Africa.
The company previously mentioned other possible acquisitions in houseware and personal care, but Drummond said the Sanmeg deal was “the only one at the moment”.
The acquisition is still subject to conditions, such as approval from the competition authorities and a due diligence.
Sanmeg is a wholesaler and manufacturer of terrestrial and satellite television reception equipment as well as accessories such as television arms, terrestrial antennas and electronics, remote extenders and wall brackets. The acquisition includes Sanmeg’s operations in the Cape and KwaZulu-Natal.
Amap said the purchase price was subject to adjustments that might be made depending on the value of stock on the completion date of the deal. The maximum amount by which the price could increase was R16m.
Once the deal was finalised, R40.5m would be paid directly to the sellers and R12.5m would be paid into an escrow account, which would be released to the seller or the purchaser once the inventory had been valued. It added that R500 000 would be retained in escrow to be used to settle any claims made against Tedelex for warranties on product provided by the sellers before the deal was done.
Daniel Isaacs, an analyst at 36One Asset Management, said the R53m price tag for Sanmeg Satellite was over 30 percent of Amap’s cash balance, which was R163.7m as at December last year. Isaacs added that over 15 percent of the profit before tax in the interim period to December 2010 came from net interest received, which would obviously decrease once this cash was paid out.
Amap’s share price rose 2.3 percent to close at R1.78 on the JSE yesterday. - Business Report