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Greek tycoon John Coumantaros’ Flour Mills of Nigeria eyes $194.6-million acquisition deal

Flour Mills of Nigeria and Honeywell Flour Mills will combine to create an industrial behemoth.

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Greek tycoon John Coumantaros.

Nigeria’s leading agro-allied group, Flour Mills of Nigeria Plc, has signed a definitive agreement to take over Honeywell Flour Mills from Honeywell Group, a leading Nigerian investment holding founded by multimillionaire industrialist Obafoluke Otudeko.

Flour Mills of Nigeria is Nigeria’s largest food and agro-allied group. Since the group commenced operations in 1960, it has grown into a leading operator in the Nigerian economy under the control of the late George Coumantaros and his son, John.

John Coumanataros, the chairman of Flour Mills, owns a majority 63.34-percent stake in the group worth N75.97 billion ($184.9 million).

The planned takeover and acquisition will create a strong national champion in Nigeria that will combine Flour Mills’ market-leading offerings, including grain-based foods, sugar and breakfast cereals, with Honeywell’s diverse and differentiated range of carbohydrates products.

The combination of the two businesses is expected to create a behemoth with N702.85 billion ($1.71 billion) in assets and a revenue of about N850 billion ($2.07 billion).

In line with the proposed transaction terms, the Otudeko-led Honeywell Group will dispose of a 71.69-percent stake in its flour milling business, Honeywell Flour Mills, to Flour Mills of Nigeria, based on an enterprise value of N80 billion ($194.7 million).

In addition, Flour Mills will also acquire an additional 5.06-percent stake in Honeywell Flour Mills belonging to First Bank of Nigeria Limited. The other stake will take the miller’s ownership interest to a 76.75-percent stake, amounting to 6,086,426,703 ordinary shares.

Honeywell Group Limited Managing Director Obafemi Otudeko, the son of Founder Obafoluke Otudeko, commented on the proposed transaction. He noted that the value unlock aligns with the evolution of Honeywell Group and its vision of creating value that transcends generations.

“For over two decades, we have supported Honeywell Flour Mills to build a strong business with a production capacity of 835,000 metric tonnes of food per annum,” he said. “Following the transaction, Honeywell Group will be strongly positioned to consolidate and expand its investment activities, including as a partner of choice for investors in key growth sectors.”

Flour Mills of Nigeria Group Managing Director Omoboyede Olusanya, said the transaction supports Flour Mills’ vision not only to be an industry leader but a national champion for Nigeria. 

“We believe that this will create an opportunity to combine the unique talents of two robust businesses,” he said. “As a result, we will have a better-rounded and more comprehensive skill set available to us as a combined diversified food business, thus enabling us to better serve our consumers, customers and other stakeholders, whilst providing employees with access to broader opportunities.”

According to the information gathered by Billionaires.Africa, the final equity price per share payable for the 76.75-percent stake will be determined on the basis of Honeywell Flour Mill’s adjusted net debt and net working capital at the date of the completion of the transaction.

As of Sept. 30, Honeywell Flour Mills had a total debt of N78.53 billion ($191.1 million), split into N19.50 billion ($47.45 million) of long-term debt with a payment date of more than a year, and short-term debt of N59.03 billion ($143.66 million) payable within a fiscal year.

With a total of N52.68 billion ($128.2 million) in cash holdings, the leading Flour Mills agro-allied group might have to fund the transaction through debt funding. This is expected to add to the group’s debt portfolio, which is presently above the N140-billion ($340 million) mark.

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Namibian tycoon Quinton van Rooyen’s Trustco wins round in court against JSE

Shares in the group rose 35.56 percent as a result.

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Quinton van Rooyen.

Trustco Group, an investment holding majority owned by Namibian businessman Quinton van Rooyen and his family, has won a round in court against the Johannesburg Stock Exchange (JSE).

The Pretoria High Court ruled that the company may not be suspended from the JSE until the hearing of its review application in September.

The presiding judge, Nicoline Janse van Nieuwenhuizen, pre-dismissed every argument made against Trustco. The judge issued a decision, in which she ordered the JSE to be interdicted and restrained from suspending Trustco shares from trading on the local bourse.

“The grounds of review are all deserving of a proper hearing in due course, and I am satisfied that Trustco has asserted a prima facie right to fair and just administrative action,” she said in her decision.

In response to the news, shares in the group rose 35.56 percent to R0.61 ($0.0367), from a price of R0.45 ($0.0271) at the start of trading this morning.

The increase in Trustco’s share price pushed its market capitalization above R985 million ($60 million) and the value of van Rooyen’s 63.94-percent stake above R630 million ($38 million).

The court also prohibited the JSE from implementing or attempting to implement the decision that Trustco restate its annual financial statements for the fiscal year ending March 31, 2019, as well as the interim results for the six months ending Sept. 30, 2019.

The legal battle between Trustco and the JSE began on Nov. 11, 2020, when the exchange’s authorities claimed that the company had not met the listing requirements for its 2019 annual financial statements and 2020 interim results.

As part of the allegations, the JSE accused Trustco of violating international accounting standards by misrepresenting features of two loans and reclassifying land that it owns.

Trustco questioned the JSE’s authority to order corporations to amend their financial statements. It claimed that only boards have that authority and stated that all transactions had been “exactly accounted for, reported, and disclosed.”

Amid the legal battle between Trustco and the JSE, wary local bourse investors sold their stakes in the company, fearing a potential delisting of its shares, which caused the share price to crash to an all-time low in July before rebounding recently by double digits.

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Ugandan tycoon Charles Mbire to pocket $1.15-million interim dividend from MTN Uganda

Mbire owns a significant 3.98-percent stake in the Ugandan telecom outfit.

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Charles Mbire.

Ugandan multimillionaire businessman Charles Mbire is on track to receive an interim dividend of Ush4.48 billion ($1.155 million) from his stake in MTN Uganda after the telecom group reported a double-digit percent increase in earnings in the first half of 2022.

MTN Uganda is Uganda’s leading telecom service operator.

Mbire, the chairman of MTN Uganda and one of Uganda’s wealthiest businessmen, owns a significant 3.98-percent stake in the Ugandan telecom outfit, which operates as the fourth operating subsidiary of the South African multinational mobile telecom company, MTN Group.

The interim dividend will be paid electronically into his bank account at a later date from the group’s retained earnings of Ush902 billion ($232.4 million) at the end of its 2022 fiscal year. It is his first dividend from the telecom company since its shares were listed more than eight months ago.

The dividend payment follows a significant rise in the group’s earnings in the first half of 2022 despite a 4.9-percent decline in voice revenue, as it looks set to replicate its stellar performance in 2021.

As a result of the company’s strong financial performance, the board of directors approved the payment of an interim dividend of Ush5 ($0.00128) per share for the six months ending June 30, totaling Ush11.95 billion ($28.9 million), which is subject to withholding taxes.

According to data retrieved from the company’s earnings report for the first six months of 2022, its profit increased by 48.1 percent to Ush193.6 billion ($50.2 million) in the first half of 2022, compared to Ush130.7 billion ($33.7 million) in the first half of 2021.

The double-digit increase in profit can be attributed to a 10-percent surge in the company’s service revenue, which was driven by a significant increase in data and fintech revenue, which were more than sufficient to offset the 4.9-percent decline in voice revenue.

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Billionaire Robert Smith’s Vista to acquire Avalara business software for $8.4 billion

Smith directs Vista’s investment strategy.

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Robert Smith.

Avalara Inc., a leading tax compliance automation provider for businesses, has agreed to be bought by Vista Equity Partners for $8.4 billion.

Vista Equity Partners is a leading global investment firm led by America’s richest Black person, Robert Smith.

The transaction received unanimous approval from the Avalara board of directors and is expected to close in the second half of 2022, subject to customary closing conditions such as shareholder and regulatory approval.

Under the terms of the deal, Vista will acquire all outstanding shares of Avalara common stock for $93.50 per share in an all-cash transaction valued at $8.4 billion, including Avalara’s net debt.

According to a source familiar with the situation, Vista has secured a total of $2.5 billion in loans from private lenders as part of the move to bring in institutional investors as co-investors.

The purchase price represents a 27-percent premium over the company’s closing share price on July 6, the last trading day prior to the announcement of the deal.

“For nearly two decades, Avalara has ambitiously pursued its vision of automating global compliance, making tax less taxing for businesses and governments around the world,” Avalara Co-Founder and CEO Scott McFarlane said.

“As a category leader, we believe that continuing to invest in innovation and experience is exciting for our customers, partners, and employees,” he said. “We are excited to work with Vista and will benefit from their enterprise software expertise as we build and improve our cloud compliance platform.”

After the conclusion of the deal, Avalara shares will no longer trade on the New York Stock Exchange. Avalara will become a private company managed by Vista.

Smith has an $8-billion stake in Vista and directs its investment strategy.

He also serves on its executive committee, the company’s governing and decision-making body for all matters affecting overall management and strategic direction. He has supervised more than 570 completed transactions, with a total transaction value of more than $265 billion.

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