Acquire a well-established provider of niche clear-view security fencing.

Gauteng
Industrial & Manufacturing
Client Code: BM009705
Turnover (Actual): R22,764,299
EBITDA (Actual): R1,629,668

Our client is a fencing manufacturer, distributor and installer with a niche in aesthetically pleasing, high-security clear-view fencing. The company is well-established working in the public sector, a market with significant barriers to entry. Registered on the central supplier database for the South African Government, the business can supply security fencing for unlimited scale projects to any department around South Africa, representing a significant opportunity for a strategic acquirer.

Key Aspects
  • The registered trademark brand is well-known in South Africa through active marketing and customers' positive word-of-mouth.
  • The company is well-entrenched in government, the most abundant user of clear-view fencing in the country due to its anti-cut/anti-climb properties, and boasts an impressive portfolio of successful projects, at departments such as Health, Justice, Police and more.
  • A significant customer base of small- to medium enterprises (SME) and engineering, procurement and construction (EPC) companies, blue-chip mining and industrial companies, property developers and individuals.
  • A robust supply chain could allow the company to quickly scale operations to meet increased demand, or expand its core business model, making it an ideal option for a larger acquirer.
  • Patent-pending products designs, well-developed operations procedures and a successful track record of government projects represent considerable intellectual property to an acquirer.
Opportunities
  • Organic growth - The company has several projects in various phases of completion - established clients continually use the company for all their progressive fencing needs. The company is well-positioned to secure future business due to its established vendor relationships and government-approved products. 
  • Cost-savings - The company's new patent-pending products make more economical use of materials without compromising strength, for improved profit margins.
  • Bolster in-house manufacturing - An acquirer may expand on the company's range of in-house manufactured products.
  • Synergistic diversification - Projects that the company supply and install clear-view fencing for include several associated products, including electric fencing, gates and lighting, and security products such as CCTV cameras. Diversifying into these markets would provide synergistic growth opportunities. 
  • Expanding the geographical footprint - The company currently primarily services the Gauteng market and could benefit from replicating its successful model to new areas across South Africa. 
  • Black Economic Empowerment - An acquirer that can increase the companies BEE preference score would benefit from the ability to tender for government projects directly.
Current Markets
  • The majority of revenue is attributable to work in the public sector via Black-Economically Empowered (BEE) Small-to-Medium Enterprises (SME's) and Engineering, Procurement and Construction (EPC) clients. The company also has significant vendor relationships in the mining and industrial sectors, as well as having clients in property development and the domestic market.
  • Gauteng is the business' primary market representing 60% of sales, followed by Limpopo and North-West Province at 15% and the balance of South Africa being 10% of revenue.