Mustek buys up Rectron shares

By Nicola Mawson for Mustek
Johannesburg, 13 Mar 2007

JSE-listed computing firm Mustek is to acquire 34.2% of Rectron Holdings as it moves to consolidate its position in the market.

The company told shareholders yesterday it would buy 39.2 million Rectron Holdings shares for up to R96.6 million. The company will pay for the shares in two tranches, the first an upfront payment of R49.75 million, and it could pay an additional R46.8 million over five years if the company reaches certain targets.

The move fits with the company's strategy of consolidating its investment in the sourcing and purchasing of hardware, software and peripherals for computers and electronic equipment and distribution, it said.

Illustrative financial effects indicate the acquisition should boost earnings by 5.9% and headline earnings by 5.8%. The company's net asset value is expected to move up 4%, while tangible net asset value should improve by 3%, it said.

The transaction is subject to the fulfilment of several conditions, including shareholder and competition approval.

Mustek's shares closed unchanged at R10.20 yesterday. Its 12-month high is R12, while its 12-month low is R8.60.