Although industrial activity countrywide still remains bogged down by a stagnant economy, there are signs of deal-making activity in the Western Cape.
Last month construction and engineering company Esor – which is now controlled by well-known Cape Town empowerment pioneer Marcel Golding – acquired the Tuboseal Group Services from Jean-Louis Frey for R33m. Esor will also be responsible for settling a balance of R3m owing on certain assets acquired in the Tuboseal transaction. In its last financial year Tuboseal posted after tax profits of over R8.5m.
The Tuboseal Group was established in 1987 and has developed into a respected pipeline rehabilitation company in Cape Town. Esor said that as a frontrunner in the pursuit of world class trenchless technologies in local municipalities and industries, Tuboseal Group had played an instrumental part in ensuring credibility, acceptance and success of trenchless rehabilitation methods in South Africa.
Esor stressed Tuboseal’s rehabilitation methods offered were all geared towards minimising disruption to the immediate environment and traffic as well as public and commercial activities. It continues Tuboseal would expand the company’s existing product offering and provide vertical integration in the maintenance of infrastructure. The company also said Tuboseal would offer attractive margins that could only be achieved in niche businesses, as well as providing a platform for Esor to grow its geographic footprint with a presence in the Western Cape. More importantly, Tuboseal should allow Esor to participate in the expected growth of infrastructure maintenance contracts and expansion of the products across Southern Africa.
At roughly the same time to Tuboseal was announced, investment holding company Sabvest – which is a significant shareholder in Cape Town-based Torre Industries – announced the acquisition of a 25% stake Flexo Line Products.
Flexo is a manufacturing business that has been based in Cape Town for over forty years. It specialises in high quality injection moulded plastic products primarily for the spice industry locally and internationally – but also for the furniture, hardware, stationery, toy and educational sectors.
Sabvest said the investment in Flexo would slot into its existing portfolio of unlisted industrial investments – which, aside from Torre, comprise trimming and labels specialist SA Bias Industries, Narrowtex and Flowmax as well as Sun Spray Food Ingredients and Masimong Chemicals.
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