RICHARDS Bay-based heavy equipment manufacturer, Bell Equipment Company SA has announced it will acquire Matriarch Equipment.
Matriarch, a long-standing partner of Bell’s, designs and manufactures a range of material handling products used predominantly in the forestry and sugar industries across local and international territories.
Bell last year collaborated with Matriarch for the conversion of Kobelco excavators for the forestry industry.
According to a statement from Bell, the intellectual property (IP) of the products designed by Matriarch is aligned to the broader strategy of the company to enhance IP ownership and to provide niche product solutions in the forestry and sugar industries.
In terms of the transaction, Bell Equipment will take-on the employees of Matriarch and acquire all the assets of Matriarch including the inventory and the operating assets to the value of R1.3 million, which approximates the net book value in Matriarch’s books of account.
Bell Equipment will pay an initial consideration of R3.8 million for the Matriarch IP plus a performance based consideration based (PBC ) on future sales performance of Matriarch products, retrospectively per quarter for five years.
The value of the IP was determined by valuing the business of Matriarch on a discounted cash flow basis.
In addition to the five-year time limit, the PBC has a monetary cap of R15 million.
Following the transaction, Matriarch will become a wholly owned division of Bell and will continue to operate from its existing workshop premises in Felixton, near Empangeni.