The company has also changed its name to Insimbi Industrial Holdings Limited.
JSE-listed Insimbi Industrial Holdings has announced that it is acquiring another scrap metal recycler, this time Group Wreck International, for R120 million. In 2016 Insimbi acquired Amalgamated Metals Recycling (Pty) Ltd for R284 million.
The transaction will become effective once all the suspensive conditions to the offer have been met. It is expected that the ruling by the Competition Commission as may be required may be the final condition to be met. All things being equal, it is expected that the effective date will be on or about 31 October 2018, assuming the timely submission of the necessary application.
Key suspensive conditions to the proposed transaction include amongst others the finalisation of the relevant transaction agreements, funding arrangements, employment agreements with key executives, appropriate immovable property rental agreements, as well as the necessary regulatory approvals as may be required (e.g. Competition Commission).
It is also a suspensive condition to the finalisation of the proposed transaction that no material adverse change would have occurred with regard the business of Group Wreck as at the effective date.
“Insimbi needs to grow by acquiring businesses that complement the existing Insimbi businesses and are accretive to earnings,” said Insimbi CEO Fred Botha.
He added that the acquisition allows for efficiencies and synergies between the two companies, including geographic expansion, raw material access for beneficiation and cost savings.
The business of Group Wreck
Group Wreck is involved in the sourcing, trading and purchasing of scrap, non-ferrous metals in KwaZulu-Natal, South Africa. In the five years since it was established, Group Wreck has experienced significant growth and is now one of the largest metal recycling operations in Durban. The business operates from two premises, in Queensmead and Phoenix and are highly mechanised with state of the art equipment and a fleet of trucks geared to handling large volumes efficiently. The business strives to supply local end users wherever possible, and excess material is exported through the company’s own shipping department, which deals directly with end users in China, Korea and the rest of the world.
Rationale for the transaction
The rationale for the transaction is to expand the geographic reach of ISB’s ferrous and non-ferrous business, expand its client base, and enhance its access to raw material for purposes of beneficiation, as well as access to an experienced management team and its international trading network.
In July 2018 shareholders were informed that the company name change had been approved at the AGM. The name would therefore change from Insimbi Refractory and Alloy Supplies Limited to Insimbi Industrial Holdings Limited.
Diversification and growth
“As the Insimbi group continues to diversify and follow the multi-dimensional growth of the past few years, it has elected to rebrand to Insimbi Industrial Holdings Limited to fully embrace and reflect the new vision and direction of the company,” the company statement said.
For more information contact Insimbi Group of Companies on TEL: 011 902 6930 or visit the website www.insimbi-iras.co.za