Torre raises standing with small acquisition
The industrial conglomerate has acquired 100% of Transformer Chemistry Services for an undisclosed sum
Embattled Torre Industries, the industrial conglomerate controlled by investment house Stellar Capital Partners, has moved onto the front foot with a small acquisition.
Torre announced on Monday the acquisition of 100% of Transformer Chemistry Services (TCS) for an undisclosed sum.
The acquisition comes at a time when Torre’s share price has been under severe pressure. The share price, which broke through the 500c mark in early 2015, is trading at around 165c per share, not far from its 12-month low of 140c. The TCS deal, which formed part of a voluntary announcement to shareholders, is not a big deal. But it fits Torre’s aim of making bolt-on acquisitions in its existing industrial segments.
TCS specialises in the analytical testing and diagnostic interpretation of insulating materials used in high-voltage electrical equipment.
In a stock exchange statement, Torre said TCS would strengthen the Joburg-based transformer analysis business within WearCheck in Torre’s analytical services segment.
WearCheck forms part of the old Set Point Group, which Torre acquired from investment company Sabvest in early 2015. Torre’s analytical services segment was a conspicuous underperformer in the six months to December with revenue dropping from R174m to R129m and net operating profit plunging to R6m from R27m previously.
At the time, Torre’s directors attributed the underperformance mainly to Set Point Laboratories, where business was curtailed by depressed levels of mining exploration activity.
The other analytical services operations — namely AMIS and WearCheck — performed satisfactorily in the interim period.