Aveng sells valve and pump manufacturing subsidiary to reduce debt
Infrastructure and resources group Aveng will sell Aveng Dynamic Fluid Control (DFC) to 100% black-owned investment company Copaflo for R165-million.
The sale will include the DFC operations in South Africa, Finland, the US, Brazil and Australia.
The transaction is expected to be finalised by October 31, subject to all contractual requirements being satisfied.
The purchase consideration will be settled through R154-million in cash and an R11-million subordinated loan advanced by Aveng to Copaflo.
The proceeds of the transaction will assist in the creation of a more appropriate capital structure and will be applied mainly to reduce debt and, to a lesser extent, for working capital requirements, Aveng says.
DFC was established in 1958 as a South Africa-based international manufacturer and supplier of valves and pumps. Its global market presence extends to the US, Australia, Finland and Brazil, with DFC supplying mainly into the water, effluent and mineral processing industries.
Copaflo invests in engineering and manufacturing businesses and is part of the Fabchem Group. It is funded by the Industrial Development Corporation.
“We are confident that Copaflo is the right partner to unlock DFC’s full potential and further enable its growth. Additionally, the transaction will ensure a sustainable future for employees, customers and suppliers of DFC,” says Aveng CE Sean Flanagan.
He adds that the sale of DFC will be a meaningful contribution toward the transformation of the South African manufacturing sector.
Further, he states that, “this transaction is an important milestone in terms of executing our strategy and achieving the Aveng of the future. It takes us one step further to our ambition of being an international infrastructure and resources group with a footprint in developing and fast-growing regions.”
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