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ELB hopeful of extracting synergies as it buys B&W

9th May 2014

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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Engineering solutions provider ELB Group is set to leverage the synergies between it and electrical and instrumentation company B&W Instrumentation &Electrical, the acquisition of which ELB is busy concluding.

ELB, which had issued over 1.96-million shares as consideration for the acquisition of B&W, said in a statement last week that B&W had joined ELB Group with a “sound order book” and the group planned to “take advantage” of project opportunities.

“There is a good cultural fit between the two organisations and the acquisition offers B&W the opportunity to be part of a larger group and bring to ELB Group the many years of B&W management experience, which will ultimately benefit the current and future customers that both organisations serve,” ELB said.

As the parties served similar industries, the acquisition was expected to create improved efficiencies and long-term sustainability for the combined group of companies.

ELB supplies materials handling and modular plants to the mining, minerals, power, port, con-struction and industrial sectors, mainly in Africa and Australasia. It said its acquisition of B&W was in line with the group’s strategy to grow its serviceability and derisk its contracting business. Analysts were cited in December as saying that, if the deal failed to materialise, B&W would be left “in a precarious position”. However, under the protection of the larger, more diversified ELB business model, B&W would once again prosper. B&W’s market capitalisation has fallen from about R420-million in 2008 to R72-million at present. ELB’s growth during the same period has resulted in its market capitalisation increasing more than threefold, from R439-million at the end of the company’s 2008 financial year to R1.5-billion.

Edited by Martin Zhuwakinyu
Creamer Media Magazine Managing Editor

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