IMPERIAL Holdings continued the aggressive expansion of its logistics division yesterday as it announced the forthcoming R724m acquisition of CIC Holdings, a Namibian company specialising in the distribution of fast-moving consumer goods. Imperial off-loaded several noncore businesses two years ago, and is concentrating on bulking up its more successful arms. The logistics division’s performance is closely linked to wider economic performance, meaning that while its turnover fell sharply last year amid the global downturn, it is set to benefit from the recovery in SA and its neighbours. Imperial’s offer, worth R2,87 per CIC share, will see it take full ownership of the company, listed on the AltX exchange and in Namibia. Imperial CEO Hubert Brody expected to complete the acquisition by November, after CIC shareholders owning 80% of the issued capital gave irrevocable undertakings to vote in favour of the deal.

The deal was “important for us in the context of expanding our logistics activities not only in SA, but also in certain of the Southern African Development Community) countries,” Mr Brody said. “This company is particularly strong in Namibia and Botswana, and we are looking to augment our current activities with the distribution and warehousing capabilities that CIC has.” There would be no lay-offs at CIC, which would continue to operate as a standalone entity. But Imperial would be able to provide services outsourced by CIC, while the parent company’s strong balance sheet would enable it to drive CIC’s expansion into other African countries. CIC is active in Namibia, Botswana, Mozambique, Swaziland and SA. The proposed acquisition of CIC follows a deal in March that saw Imperial take a majority stake in e-Logics, a software producer that was incorporated into the logistics division.

“Logistics is a business that gives very good returns over time,” Mr Brody said. “It’s a very good cash-flow business, and we’re very strongly entrenched with a lot of competitive advantages.” But he denied that the company’s appetite for takeovers had increased in the wake of the economic slump. “We’ve always continued acquiring, even during the right-sizing process — although it’s easier now to focus on acquisitions than it was.” Warwick Lucas, an analyst at Imara SP Reid, said Imperial was now “much more wieldy than a few years ago — they’ve tightened up the business a hell of a lot”.