SOUTH AFRICA – Bidvest has agreed to buy Eqstra Fleet Management and Logistics from enX for an enterprise value of US$222.34 million (R3.1 billion).
Eqstra is a fleet-leasing and management-solutions business focused mainly on the corporate sector which by end of August 2018 had 12,300 vehicles under lease.
Bidvest, whose brands include Rennies Travel and motor retailer Bidvest McCarthy, said it is “uniquely positioned to offer a cradle-to-grave fleet solution through Bidvest Bank and the automotive division”.
“The acquisition will create funding, scale and operational efficiencies and result in a more balanced fleet exposure,” it said.
“The acquisition of Eqstra is in line with Bidvest’s stated strategic intent to focus Bidvest Bank on its fleet management niche,” the services, trading and distribution group has said.
According to an update by Business Day, the purchase price will be settled by Bidvest Bank, and Eqstra’s debt will be refinanced as part of the deal, Bidvest said.
By end of August 2018 Eqstra leasing assets totalled to US$187.31 million (R2.6 billlion) while the company’s annual profit after tax was US$10.37 million (R143.9 million).
Bidvest says that it expects the deal will be finalised towards the end of 2019, assuming the necessary approvals are secured in time.
In October 2018, enX said it was looking to offload Eqstra, “which may be better suited under a different structure so as to optimise its value proposition”.
EnX, a Johannesburg Stock Exchange -listed industrial group, has said that Bidvest is well placed to provide Eqstra “with value-enhancing opportunities via access to a larger pool of capital at a lower cost and to an existing national motor vehicle distribution network”.
“The board is in the process of considering the optimal application of the cash proceeds arising from the transaction.”
As one of the largest fleet managers in South Africa, Eqstra sale is expected to help enX to reduce its debt.
Bidvest said in June that it had made several bolt-on acquisitions, and “a few larger-sized acquisitions are being pursued”.