Listed retailer of building materials and associated products, Cashbuild says it wants to purchase Pepkor Holdings subsidiary, The Building Company (TBC), for R1.07 billion.
“Cashbuild’s management identified geographic expansion and incremental access to additional segments of the market as key areas for potential growth,” it said in a statement on Tuesday (4 August).
The group said that the transaction is anticipated to result in the following benefits to the company and its shareholders:
- An increased retail store footprint presence in Cashbuild’s previously underrepresented regions, particularly those in the Western Cape, Eastern Cape and Kwa-Zulu Natal;
- A broader reach into the middle-to-higher income customer segment, a target market currently underserved by Cashbuild’s current offering;
- Incremental competency in accessing and servicing the building contractors segment of the market;
- Improved operational efficiencies and improved future trading profitability through access to additional suppliers, inventory and the optimisation of delivery routes.
The Building Company
TBC is a building materials retail and wholesale business, providing a service offering to the construction industry including residential, commercial and industrial markets.
In the prior financial year ending 30 September 2019, TBC achieved revenue of R8.2 billion across the retail, wholesale and specialised divisions. In the twelve-month period ended March 2020, it achieved revenue of R8 billion.
TBC offers a portfolio of 13 brands across its three divisions, namely:
- The retail division which houses Buco and Timbercity;
- The wholesale division which includes Cachet and MacNeil chains,
- A specialised division offering differentiated products across brands including Bildware and Tiletoria.
Cashbuild said that TBC has an attractive portfolio of store locations with an established presence across the coastal regions of South Africa, comprising 160 TBC outlets, and 21 franchise stores.
The portfolio includes 91 Buco stores, 75% of which are merchant stores with the balance being cash stores, and 20 Timbercity stores.
The remainder of TBC’s store footprint largely covers both the wholesale and specialised divisions.
TBC’s presence, inclusive of franchise stores, is predominantly based in South Africa (171 stores) with a further presence in the rest of Southern Africa including Namibia (7 stores), Botswana (2 stores) and Zambia (1 store).