Dished End purchase could cost Hudaco up to R79 million

Hudaco, the listed industrial and automotive consumable products distributor, has acquired manufacturer Dished End for a maximum of R79 million. The company said it had acquired Dished End’s trading assets and liabilities effective from the beginning of May 2017.

Hudaco added that it had made an initial payment of R36 million for the company, which manufactured dished ends. Hudaco said the final total purchase price would depend on the average profits over a three-year earn-out period.

Dished End manufactures dished ends, which are the end caps on pressure vessels. These ends vary from 0.4m to 5.5m in diameter and from 4mm to 25mm in thickness. They are manufactured in various metals as required by the particular type of vessel. Dished End also offers the pressing and flanging of small conical sections and a range of single pressed weld caps.

The Dished End Company was established in 2011 and increased its foothold and capacity in 2013 when it purchased Tank Ends, a well-known and respected company in the industry that had been operating for over 40 years.

Dished End operates from a 3700m² facility in Greenhills Tunney Ext 7, Elandsfontein, Gauteng.

Dish end manufacture is a niche business within the fabricating world but the call for the use of dish ends is numerous. Pressure vessels are used primarily in the transport and storage industries, and hundreds of different industries require pressure vessels. These include the food and beverage, gas, petroleum, heating, cooling, water filtration and brewery industries, to name a few, and they all require pressure vessels in some form or shape. In fact, any industry that is using a pressure vessel or storage tank requires a convex end.

Hudaco Industries is a South African group specialising in the importation and distribution of branded automotive, industrial and electrical consumable products, mainly in the southern African region. Included in the Group are other manufacturing companies of engineering related products. These include Bosworth, Ambro Steel, Ernest Lowe, Gear Pump Manufacturing, Joseph Grieveson and Proof Engineering.

Hudaco said the transaction was below the threshold for a category two transaction, which required disclosure in terms of the JSE’s listing requirements, but believed it appropriate to inform shareholders about the transaction.