Pepkor enters into sale and purchase agreement with Cashbuild
Pepkor plans to sell its entire issued share capital of The Building Company to Cashbuild.
Pepkor has entered into a sale and purchase agreement with Cashbuild for the disposal of the entire issued share capital of Pepkor’s wholly owned subsidiary, The Building Company (TBC).
According to a statement by Pepkor, the transaction will enable the retailer to streamline its portfolio of businesses and focus on its core business of discount and value retail.
TBC is a leading Southern African building materials retail and wholesale business, providing services to the construction industry. In the prior financial year ending 30 September 2019, the company achieved a revenue of R8.2 billion across the retail, wholesale and specialised divisions. In the twelve month period ended 31 March 2020, the company achieved a revenue of R8 billion.
“Following a prolonged period of corporate activity that included various acquisitions, TBC has done well to restructure and consolidate the business. It has made significant progress in defining its value proposition, establishing a strong corporate culture, clarifying strategy and prioritising a central procurement strategy,” the statement read.
Pepkor will use the over R1 billion proceeds to further reduce debt in line with the group’s ambition to reduce its gearing levels to enhance the flexibility of its capital structure.
According to a statement by Cashbuild, it’s management identified geographic expansion and incremental access to additional segments of the market as key areas for potential growth. The acquisition of TBC allows Cashbuild the opportunity to drive these growth initiatives.