JSE-listed automotive, industrial and electronic products importer and distributor Hudaco will acquire fire protection distribution company Brigit's trading assets and liabilities, including Brigit Fire, Brigit Systems and Portagas, with effect from September 1.

The fire security offering of Brigit will complement and enhance the range of products and services that Hudaco offers to the security sector through its Elvey Security Technologies and Pentagon businesses. They will work together in developing their route to market and expanding the combined customer base, the company says.

Hudaco will be able to use its experience and expertise in value-added distribution to enhance Brigit’s market position, resulting in long-term benefits to shareholders, it says in an announcement.

Hudaco will pay an initial R143-million in cash. It is then expected to pay two further tranches in cash on the first and second anniversary of the transaction, based on actual average levels of profitability achieved in each of those years.

"The purchase consideration will be a multiple of the average yearly profit after tax, excluding interest received, of Brigit for two years after the effective date.

"The business of Brigit is an ideal fit for Hudaco as it focuses on supplying quality, branded products and services, while providing significant value-add for the customer, which is an area of core competency of Hudaco," the company says.

One of Hudaco’s key strategies is to acquire new businesses in similar fields of activity when the opportunity arises. The transaction is consistent with Hudaco’s strategy of diversifying its portfolio, the company says.

Brigit is a South African group that offers fire detection, fire containment protection and fire suppression systems. Brigit distributes several products that it has developed itself, along with international products, throughout sub-Saharan Africa. The products offered are singularly focused on fire security and safety disciplines, specifically required for commercial and industrial applications.

Brigit has 65 employees in three locations in South Africa and generates revenue of about R215-million a year.

Brigit produced R36-million net profit after taxation in the financial year ended February 28, and has committed to deliver a minimum of R55-million net trading assets on September 1, Hudaco says.