Newsletter #233 (View other news stories)
Black Economic Empowerment co. buys TCM distributor
Johannesburg, South Africa
Thursday, 3 Nov 2005
TCM distributor Criterion Equipment is South Africa’s first major black-owned materials handling company after being bought by J&J Group.
J&J Group, a black economic empowerment (BEE) Johannesburg-based investment company, acquired Criterion from Murray & Roberts for R75 million (USD11.2 million) and will now own 90 per cent of the business. Its management team will have the remaining 10 per cent stake in Criterion.
Murray & Roberts CEO Brian Bruce said the sale of Criterion was part of the company’s strategy to focus on the construction economy.
"We were keen to sell the business to an established company like J&J with whom we have developed a good partnership on other initiatives. We are also facilitating the deal by providing an element of vendor finance," Bruce said.
J&J Group COO Chris Jardine said Criterion’s good management, solid track record and the growing materials handling industry influenced the group’s decision to buy the company.
"Our approach to Criterion will be similar to the approach we adopt with our other investments, which is active participation and solid value-adding. We will grow Criterion's market share organically and by acquisition and will broaden the range of products.
"This acquisition is part of J&J's overall strategy in targeting investment in infrastructure and related businesses that, in our view, have growth potential," Jardine said.
Established in 1976, Criterion has been an agent for TCM forklifts since the 1990s. It has 11 branches and agencies in South Africa and agencies in various Southern African countries, like Namibia, Zambia, Zimbabwe, Mozambique, Swaziland and Lesotho.
Graham Callanan, managing director of Criterion Equipment, said: "BEE players have traditionally found this market difficult to penetrate because it requires significant capital outlay and geographic spread."
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