Electronic and electrical equipment company Jasco Electronics Holdings aims to make an acquisition this year.
Newly-appointed CEO Martin Lotz says the company is actively investigating opportunities that can be absorbed into its portfolio. The strategy, in existence prior to Lotz`s appointment, complements its aim of growing organically.
Jasco recently spent three months trading under cautionary, as it was at an advanced stage of negotiations with a possible acquisition. However, the company walked away as the risk-reward ratio was not in its favour.
The company has a positive bank balance, having eliminated the R80 million debt it had accrued in 2001, and is actively building a war chest for an acquisition, Lotz confirms.
Considered options
Jasco, which has telecommunications, manufacturing and security divisions, has a gearing ratio of 0%. The company would look at incurring debt as the cheapest option to do a buy out, should its bank balance be insufficient. Lotz says even a 2% rate hike would still make debt the cheapest option, but he would limit gearing to 30%.
Depending on the size of the acquisition, however, Lotz is not averse to issuing shares to do a takeover.
Lotz replaced Joe Madungandaba as the group`s CEO with "immediate effect", the company announced on Wednesday. Madungandaba has been appointed as the company`s chairman.
Lotz has been with Jasco since 2000 and was promoted from financial director to COO in 2004. As COO, he focused on driving the group`s organic growth strategy.
The process of appointing a financial director is progressing and an announcement will be made as soon as possible, the company says.
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