The group said on Monday it would be buying a 92.5% share in Taylor Blinds and Shutters, and NMC Decorative Mouldings for a total of R150m.
The company, which sells barrier security products in SA and elsewhere in Africa, says the deal with seller Odyssey House, advances its strategic objectives of diversifying and expanding its product range and distribution network. The purchase will be through a subsidiary, Subco.
Taylor Blinds specialises in designing, manufacturing, marketing, distributing and servicing a wide range of blinds, shutters and security doors in the South African market.
NMC distributes imported decorative mouldings.
"The Taylor Blinds product range including its Shutterguard range, enjoys strong market share, particularly in Gauteng and the Western Cape," Trellidor said.
The group said the new businesses provide Trellidor with strong brands, strong management and a strong distribution network for the development of home improvement markets that are distinct from Trellidor’s own markets.
The deal should be finalised by the end of June. It will be settled in two tranches. The first tranche involves an "effective cash payment" of R121m, as well as the assumption by Subco of certain liabilities.
The second tranche will involve an effective cash payment of up to nearly R28m. The second tranche will be paid in cash by no later than the 10th business day, following the finalisation or audit of Subco’s financial statements for the 12 months ending April 2017.
It will be subject to the business achieving profit after tax of at least R33m for the 2017 financial period. Should the actual sustainable profit after tax — and before cost of debt — be less than this, the second tranche will effectively be reduced in proportion to Trellidor’s shareholding in Subco by R5.50 for each rand of shortfall.
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