Listed shipping and transport group Grindrod has acquired a 50% stake in Sheltam Locomotive and Rail Services for an undisclosed amount, the company announced on Monday.
Although the purchase price is undisclosed, indications by Grindrod management are that it is the largest acquisition in Grindrod’s land-freight expansion programme to date.
Based in Port Elizabeth, Sheltam owns and operates a substantial fleet of locomotives. It also supports a marine division servicing offshore marine power plants and an air-charter business servicing South Africa and adjacent countries.
Commenting on the acquisition, Grindrod MD Ivan Clark said: “We are extremely pleased with the acquisition, which follows our stated strategy of investing in the South African logistics industry. The strong shipping markets continue to generate good cash flows, which we need to invest carefully in core businesses.”
The current owner and MD of Sheltam, Roy Puffett, stated: “This is extremely exciting for Sheltam and will take the company to the next level of growth. There are substantial synergies in cross-marketing opportunities between Grindrod and Sheltam, which can be capitalised upon.
“In addition, a strong partner like Grindrod would assist Sheltam in maintaining its position of being the number-one private rail operator in Southern Africa.”
Grindrod’s land-freight director, Laurence Stuart-Hill, said: “The acquisition of a 50% stake in Sheltam not only provided Grindrod with a good investment opportunity, but also a sound platform to progress any rail privatisation and concessioning opportunities in Southern Africa. The business of rail went hand in hand with Grindrod’s strategy of owning the complete supply chain.
“Our vision is to offer to customers an integrated chain utilising owned service companies”.
The Sheltam acquisition follows Grindrod’s recent announcement of planned spending of up to R1-billion on the expansion of its land-freight businesses. It also follows closely on the company’s acquisition of Boltt Removals, its takeover of facilities from Uniroute Logistics and its acquisition of terminal operator African Portland Industrial Holdings. — I-Net Bridge