INDUSTRIAL conglomerate Amalgamated Regional Trading (Art) Holdings, reported by businessdigest earlier this year to have been on the prowl for strategic acquisitions, has swooped on Print Originators in
a deal likely to strengthen its revenue streams.
An agreement for the acquisition, announced by the Art board yesterday, was signed during the first week of this month between Art and the Infrastructure Development Bank of Zimbabwe (IDBZ), the majority shareholder in Print Originators.
The board statement issued yesterday said the acquisition had been consummated on October 3, but indicated that regulatory approvals from the Competition and Tariff Commission and the Zimbabwe Stock Exchange (ZSE) were still pending.
Under the terms of agreement for the acquisition, IDBZ transferred its 87,35% stake in Print Originators to Art Holdings in exchange for 1 101 775 Zimbabwe depository receipts (ZDRs).
“Minority holders holding between them 12% have accepted the offer. Post the transaction, the total number of ZDRs to be issued to Print Origination shareholders is 1 261 333, being approximately 0,46% shareholding in Art,” the Art board said in a statement signed company secretary Franklin Mukarakate.
Art earlier this year sought shareholder approval to add close to 13% of its authorised ordinary shares above its abundant cash resources to spend in the acquisition of complementary businesses.
Businessdigest had reported that the group, buoyed by a strong balance sheet, was likely to pounce on its competitors on the market.
Art is involved in paper manufacturing, paper converting and distribution, pen manufacturing and lead-acid battery manufacturing and distribution. The board said the acquisition of Print Originators was likely to extend the group’s value chain into printing.
The group has a near-monopoly in the manufacture of newsprint in the country. The paper manufacturing and the converting and stationery divisions form the core of Art’s business operations, while the battery manufacturing and retail division is non-core.
Art’s battery manufacturing wing, Chloride Batteries, was itself subject to a failed hostile take-over bid by a consortium of cash-rich bankers nearly two years ago.
The board this year received shareholder approval for the placement of 40 million authorised but unissued ordinary shares in the capital of the company under the directors “to issue at their absolute discretion”.
A rated market analyst, speaking to businessdigest when the board was seeking shareholder assent, said: “I think the directors have an eye on something. They have an idea what they want to use the shares for.”
Art directors had admitted that they would use the authority granted by shareholders to “make a contract or contracts to issue ordinary shares”. Indications are that Art still has huge potential for further acquisitions, and could use the shares placed under the control of directors as a cash consideration in any planned acquisition.