Monday, 12 October, Cape Town - Afrimat Limited ("Afrimat"), the JSE-listed black empowered open pit mining group that supplies industrial minerals and construction materials, today announced another strategic acquisition that will further diversify its product offering, in line with the group’s strategy.
Afrimat is acquiring lime and associated products producer, Cape Lime, which has roots dating back to 1946. The group will acquire both of Cape Lime’s operations, located at Vredendal and Robertson in the Western Cape.
Andries van Heerden, the CEO of Afrimat, said that, "Although we are no stranger to acquisitions, this is the largest acquisition we have made to date. We are confident that the quality of these assets, coupled with the marketing strength of Afrimat, will ensure the investment is quickly recuperated."
The total consideration for 100% of the shares in Cape Lime, which is to be settled by a combination of cash and Afrimat shares, amounts to R276 million. The sellers are private owners and the empowerment group Dormell. Current operational management, who are well versed in the industry, will remain in place.
"We are pleased to retain the expertise within the business," said van Heerden. "The company is well run and efficient and this makes integration into the Afrimat group of companies that much easier."
Afrimat has for the past few years made strategic acquisitions in order to diversify the group away from the traditional aggregates business. The acquisitions have ensured that the group has a more evenly distributed revenue stream and good margins across the business.
"This acquisition is an extension of our diversification strategy aimed at leveraging off our core business, not only in new markets but also by offering new products in existing markets," van Heerden said.
Cape Lime is known for exceptional quality mineral products supplied to various niche markets such as manufacturing industries producing chemicals, filler, glass, paint and food products. Its products are also used for water purification, soil treatment, effluent treatment, building and construction. "The mineral deposits are amongst the best quality of its kind in South Africa" added van Heerden.
The life of the remaining resources at both locations is in excess of 30 years.
The due diligence process will now commence and the transaction is subject to this process, as well as gaining approvals from the competition authorities and the Department of Mineral Resources.
"We are pleased to have Cape Lime in the Afrimat stable to enhance our portfolio of specialised products," concluded van Heerden.
Issued for: Afrimat Limited
Contact: Andries van Heerden, Chief Executive Officer (CEO)
Tel: 021 917 8840
Account: Keyter Rech Investor Solutions
Contact: Vanessa Rech
Tel: 087-351-3814 or 083-307-5600
Date: 12 October 2015