Bloomberg News

Imperial Holdings to Buy Lehnkering for 173 Million Euros

September 30, 2011

(Updates with terms of deal starting in second paragraph.)

Sept. 30 (Bloomberg) -- Imperial Holdings Ltd., which owns South Africa’s largest auto-dealer network and logistics businesses in Europe, agreed to buy Lehnkering Holding GmbH to gain access to Germany’s growing trade with emerging economies.

Imperial will pay 173 million euros ($234 million) for the business, which it said has a total enterprise value of 270 million euro including net debt of 97 million euros, the Johannesburg-based company said today.

“Lehnkering provides Imperial with an ideal opportunity to expand into global emerging markets which are served by German exports,” Imperial said.

Lehnkering, which has its headquarters in Duisburg, Germany, has consistently increased profit for the last eight years and operates in similar industries to Imperial’s international logistics arm based in the same city, the South African company said. Imperial is buying Lehnkering from Lukas Sweden AB and the German company’s managers.

Imperial rose as much as 1.4 percent to 106.59 rand and was up 0.2 percent as of 9:37 a.m. in Johannesburg trading. That narrowed the stock’s decline this year to 17 percent, valuing the company at 24.5 billion rand ($3.06 billion).

Inland European Access

Imperial said on Sept. 20 that it’s acquiring a controlling stake in Dettmer Bulk Reederei, a family-owned inland European shipping company, for an undisclosed amount. The Lehnkering purchase will also improve Imperial’s competitive position in European inland shipping, ports and terminals operations, warehousing, distribution and contract logistics, it said today.

Imperial Chief Executive Officer Hubert Brody said on Aug. 24 that the company has “a couple of billion rand to spend on acquisitions.” In the year through June, Imperial concluded nine purchases, its debt-to-equity ratio of 34 percent left it with “significant room for expansion” as its gearing target was in the range of 60 percent to 80 percent, according to its earnings statement.

The Lehnkering deal will be financed by euro-denominated banking facilities secured for the transaction, Imperial said. A portion of the acquisition costs will be funded from Imperial’s South African operations.

--Editors: Tom Lavell, Antony Sguazzin

To contact the reporter on this story: Sikonathi Mantshantsha in Johannesburg at smantshantsh@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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