27th May 2014 10:31
LONDON (Alliance News) - Cambria Africa PLC Tuesday said it has agreed to buy the outstanding share of Chemicals & Marketing Company Ltd, a Malawi chemicals distributor, for 5.5 million Cambria Africa shares.
Cambria Africa shares were Tuesday quoted at 5.5 pence, untraded, making the deal worth GBP302,500.
In a statement, the southern Africa-focused investment company said the acquisition of Chemicals & Marketing, which originally emerged out of British chemicals company Imperial Chemical Industries, will diversify its subsidiary Millchem in terms of geographical reach, as well as products and services. According to Cambria Africa, the deal is in line with Millchem's regional roll-out strategy, giving it national coverage through Chemicals & Marketing's branches in Blantyre, Lilongwe, and Mzuzu.
"We are thrilled to announce the acquisition of C&M, a transformational complement to Millchem and its regional growth strategy. Following closing of this transaction, Millchem will have immediately grown its top line over 50%, have a third of its sales in Malawi, and have more than 15% of its sales from new, attractive product lines," Edzo Wisman, chief executive, said in a statement.
"Malawi represents a significant and enticing growth opportunity for Cambria and through this acquisition of C&M we are diversifying our Millchem business into another high growth jurisdiction. This is directly in line with Cambria's strategy of building high growth, high quality regional companies," Wisman said.
The identified potential synergies include improving gross margins through enhanced sourcing, pursuing joint cost-efficiencies and adding new suppliers, product lines and value-added services.
Chemicals & Marketing reported USD2.5 million of sales in 2013, with earnings before interest and tax of USD177,000.
"This transaction commences a very exciting new growth phase for C&M, which with the support, resources and infrastructure of Millchem and Cambria will enable us to take better advantage of the opportunities open to us in Malawi," C&M Managing Director Dumisani Chisala said in a statement.
"We at C&M are looking forward to joining Millchem and the wider Cambria team, as we look forward to building a significant Southern African regional chemical distributor, with strong ties into the international chemical distribution community," Chisala said.
By Samuel Agini; [email protected]; @samuelagini
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