IN CBN’s last edition of 2013, our main article predicted a busy year for Cape Town-based industrial supplies group Torre. But not in our wildest dreams did we think the acquisitive Torre would bank a slew of deals before our next edition.
Torre’s most significant (and rather surprising) tilt was at Control instruments, the automotive parts supplier, which has its flagship Gabriel operation, based in Retreat. In this rather inspired deal, Torre has snatched a 34% stake in Control and has outlined plans to buy 100% of the company’s shares in a subsequent buyout offer. Control has a market capitalisation of around R180m, which makes it a rather big bite for Torre to swallow.
Understandably Torre has issued plans to raise up to R175m in new capital by issuing new shares to selected investors in order that its balance sheet is not strained at this delicate juncture by the acquisition of Control. Currently Torre’s main operational focus lies in Tractor &Grader Supplies (TAGS) along with smaller interests in forklift (Forktech) and crane hire (SA French.) Control, which boasts turnover of around R570m in its last financial year, will add a new dimension to Torre – most notably bring aboard a well-regarded brand like Gabriel.
Torre also has the chance to bring its turnaround skills to Control, which has endured mixed fortunes over the last decade. While Control is the ‘gorilla’ transaction, Torre also brought a number of smaller deals to book over the festive season. Torre has also made its first major move into Africa (where crane hire subsidiary, SA French, already operate extensively) with the acquisition of 85% Kanu, an equipment and spare parts business in West Africa, for around R70m. Kanu is the authorised dealer for Bell, Liebherr (Liebherr Earthmoving and Liebherr Mobile Cranes,) the Wirtgen Group, Deutz, and Tech King tyres in the Republic of Congo as well as the authorised dealer for Bell in Cameroon and Equatorial Guinea.
Basically Kanu sells and rents capital equipment and spare parts and also provides workshop and re-build services to its customers in the agricultural, construction and mining sectors in the Congo. Torre CEO, Charles Pettit, said Kanu offered growth into West Africa with the possibility of further regional expansion potential. He said strong growth was expected in mining and infrastructure spend in Congo, adding that Kanu was a defensive revenue business with a good mix between equipment, rental and recurring parts sales. A second beachhead in Africa has been opened up in Namibia with the acquisition of 51% of Windhoekbased Power Parts CC.
This is an established business that has been operating in Windhoek and the Namibian west coast region for over 20 years. Power Parts will form part of Torre’s existing TAGS business. To top it all, Torre has also managed to secure a financing arm with the acquisition of Beech Finance, a specialist in trade finance and foreign exchange services to mainly industrial customers in the Southern African region.
Pettit said the business would be renamed Torre Capital, and the intention was to build off its core competencies in trade finance and foreign exchange as well as other financing solutions, advisory and treasury services to Torre and some of its selected customers. Pettit explained that the big advantage of acquiring Beech was to secure a platform for future diversification in the provision of in-house financial solutions.
By Jenni McCann