• Friday, May 24, 2024
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Imperial Holdings plans to acquire 49% stake in UAC’s MDS Logistics


Imperial Mobility International, a wholly owned subsidiary of Imperial, has entered into an agreement with United African Company (UAC) Nigeria for the former to acquire 49 percent stake in the latter’s wholly owned subsidiary, MDS Logistics, which is currently listed on the Nigeria Stock Exchange (NSE).

UAC Nigeria is a conglomerate with interest in virtually all sectors of Nigerian economy, especially in the industrial and housing sectors where its real estate development arm, the UAC Property Development Company (UPDC) Plc, is a market leader.

MDS is a leading provider of supply chain and logistics solutions in Nigeria, offering warehousing and distribution solutions primarily in the FMCG, pharmaceutical and telecommunications industries through a network of 50 distribution centres.

A statement from the company signed by Gbemi Ipaye of the Equity Research Department reveals that in UAC’s financial statement in 2012, MDS contributed about 6 percent of the conglomerate’s revenue and 11 percent of its profit before tax (PBT).

Ipaye says that the transaction offers Imperial Logistics an entrance into the Nigerian market, while offering UACN the needed technical know-how, as did the Tiger Brands and UAC Foods transactions.

“Imperial will acquire 49 percent of the issued share capital of MDS for a cash consideration of USD26.7 million”, he disclosed.

Continuing, he said, “We currently estimate the value of MDS at a 10 percent discount to the Nigerian industrial companies, which places its fair value estimate at about N12.1 billion, about $78.1 million”.

He added that they estimate the cash consideration being paid by Imperial represents 34.2 percent.