This business is situated in a small town 50 kilometers east of Pretoria. and was started by the current owners Father in 1973. They started as an engineering company specializing in tool and die-making for the plastics industry. Today they specialize in the design and manufacturing of components used in South Africa’s extensive mining-, construction-, agriculture-, and retail industries.
They are ISO9001 compliant and is an award winning supplier to a major mining house, and as such are subject to annual audits by the mining house to verify that their quality standards are being maintained and improved year on year.
Like most white owned manufacturing businesses it has suffered a severe decline in business as a result of BEE and Chinese Imports. BEE is the biggest factor as there is still sufficient business available in quantities that Chinese manufacturers refuse to take on. Unfortunately, being white owned and not transformed they find it almost impossible to secure any significant contracts. The business is being kept alive by long standing clients but until it transforms will struggle to compete in the market they wish to serve. The business at its height turned over R12.0m per annum, and currently this is down to R5.0m
The owner has developed three products which has incredible potential in the market and this will be included in the sale. More information on this will be provided to a serious and qualified buyer. Two of the products they gave the patent rights to one of their clients in return for the worldwide manufacturing rights.
The business operates from two very neat and clean buildings in an industrial area of the town. The building form part of the sale as the cost of relocating the assets would be substantial. However, if the buyer only wants the assets that can be negotiated,
The business is being sold as a going concern to ensure the transaction is zero rated for VAT, but the price is based on the second-hand replacement value of the assets, which is R14.0m. So what is for sale is the business assets worth around R14.0 with a discount of R3.0m, plus you get a going concern turning over R5.0m, and three growth opportunities that together represent a potential turnover of R 12m p.a. The business is currently just better than breakeven excluding owners income of about R400k.
The property is in a property holding company and was recently valued at R14.0m.
The business is for sale at R11,0m negotiable and an offer of R11.0m on the property will be accepted.
PLEASE NOTE: THIS BUSINESS IS NOT SUITABLE FOR ANY GOVERNMENT FUNDING I.E. IDC,NEF,SEFA AND NEITHER ARE THE FINANCIALS AVAILABLE TO RAISE FUNDING.
