Invicta SA Holdings to acquire Forge Industrial Group

Purchase includes the businesses of Toolquip & Allied and F&H Machine Tools.

Invicta Holdings subsidiary Invicta SA Holdings has entered into an agreement to buy Forge Industrial Group, it has been announced. The value of the deal, which will entrench Invicta’s position in the industrial and engineering industry, was not disclosed. The acquisition will be complete after the fulfilment of certain conditions precedent, including Competition Commission approval.

The Forge Industrial Group includes a number of importers and distributors of engineering related products such as Toolquip & Allied, machine tools importing company F&H Machine Tools and industrial conveyer belting and related components company Belt Brokers.

The Forge Industrial Group formed part of the portfolio of private equity and capital management company Westbrooke Alternative Asset Management, which is owned by management, the Capricorn Capital Group and CapWest. Capricorn is an alternative asset manager with a focus on private equity and hedge funds. It is an associate of Yellowwoods, an international investment and insurance group, and an affiliate of the Hollard Insurance Group. After the disposal of Forge, Westbrooke will still have brands such as Coricraft, Dial-a-Bed, Mattress Factory, Sleepworld and the Volpes Linen Company in the portfolio.

The Forge Industrial Group was formed in 2011 when the commercial and industrial interests of Westbrooke were merged into one group. Toolquip and F&H Machine Tools have been in the Westbrooke stable since 2007. Forge companies are importers and distributors of engineering related products, machine tools and industrial conveyer belts and components. The company operates through 11 branches in South Africa, including three distribution centres in Gauteng, and sells more than 110 000 line items.

Invicta Holdings Limited is an investment holding company for a group of companies that wholesale and retail bearing and transmission equipment, agricultural machinery and spare parts for the automotive and agricultural industries.

Companies such as Bearing Man Group, Hyflo Group, Screen Doctor, Hansen Transmission, Man-Dirk Group, OST and Autobax are part of the group.

Forge will form part of Invicta SA’s Engineering Solutions Group.

Christo Wiese is a major investor in Invicta. In the aftermath of the Steinhoff debacle the Financial Times says this one Wiese-related entity has received little attention. Wiese is the largest shareholder of Invicta, holding more than a third of its ordinary shares, and is non-executive chairman. His son, Jacob Wiese, is also a non-executive director.

The article says Invicta is a holding company that primarily owns stakes in companies distributing industrial equipment to farmers and miners. Its annual reports are emblasoned with tractors, combine harvesters and men in hard hats.

But dig into the notes to its financial statements, and rather more surprising items appear, it continued. In fact, it might be the only company in the world whose annual reports have line items for both ‘golf cars’ and ‘credit-default swap derivatives’, it continued.

Invicta’s investment in credit-default swaps first appear on its balance sheet in its 2008 annual report. That year a R218 million ‘credit default swap derivative’ appears under its financial assets. The same amount is booked through its income and then netted out in expenses, right below the ‘golf cars’.

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