Torre attracts buyers as it prepares to delist. A consortium of private equity funds plans to separate Torre's industrial and

analytical services businesses if the R771m deal proceeds.

Private equity firms Ethos and Apex Partners have proposed an offer to buy

Torre Industries and delist it from the JSE. The joint bid comes as Torre

takes its own steps to go private.

In a statement yesterday Torre said it had received a firm intention to make

an offer from Main Street 1641, a special purpose vehicle established by the

private equity funds. They plan to offer Torre shareholders 1.05 rand a share, as

well as a cash dividend of 35c and a maximum deferred, top-up cash payment of

10c a share if the scheme becomes operative. That values the offer at 771 rand

million, or 1.50 rand a share. The cash dividend and offer consideration

represents a 44.7% premium to the 30-day volume weighted average traded price

of Torres shares as at 7 November.

Torre held off on paying a final dividend for the year to end-June after it

told shareholders that it planned to delist as a precursor to raising black

ownership in the group. It supplies parts and components to the mining,

construction, industrial and automotive sectors and provides analytical and

testing services to mining and construction. It also sells and rents branded

capital equipment. In July it said increasing black ownership above 51% was a

business imperative.

The buyers plan to separate Torre's industrial businesses (TI) from the

analytical services businesses (TAS), which they say will improve the

operational performance of the two units.

The consortium believes that the transaction and subsequent separation of TAS

and TI will unlock value by allowing the businesses to operate independently

and receive focused management attention, strategy implementation and enhanced

empowerment credentials," Torre said.

Torre's shares ended 18.5% higher at 1.28 rand. Stellar Capital, which owns 57% of

Torre, gained 9.1% to 60c.

Ethos and Apex Partners are taking Torre Industries private in a deal worth

over 770 rand million. That's 10.8x EBITDA multiple - looks very steep. Torre will

be delisted from JSE. I guess they are playing the SA Inc narrative, hoping

macro economic fundamentals will improve

-- The Northerners (@trevmuchedzi) November 12, 2018