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Steinhoff-linked KAP rises to seven-month high after purchase

To R6.75 a share.

KAP Industrial Holdings Ltd., the South African company whose biggest investor is Steinhoff International Holdings NV, rose to a seven-month high after agreeing to buy plastics manufacturer Safripol Holdings Pty Ltd. for R4.1 billion ($308 million).

KAP rose 3.1% to R6.75 by the close in Johannesburg, the highest since Jan. 6. Almost 15 million shares were traded, more than seven times the three-month daily average.

KAP will buy Safripol in cash, on a debt-free basis, from Rockwood Private Equity, Thebe Investment Corp. and management in a transaction that’s expected to be completed by Jan. 1, the Stellenbosch, South Africa-based company said in a statement on Wednesday. Safripol will form part of KAP’s diversified chemical division, which already includes its Hosaf and Woodchem businesses.

KAP, whose businesses range from transporting fuel to producing automotive components and timber, has already been expanding through acquisitions. Earlier this year, it agreed to buy Autovest Ltd., a car accessories producer, which followed the 2015 purchase of a mattress business. Safripol makes polypropylene and high-density polyethylene, which are used in a range of industrial and consumer products.

“The Safripol business operates in the chemical sector and produces complementary products to those of Hosaf, with a similar business model,” the company said. “The transaction represents an ideal fit for KAP in terms of its key investment criteria.”

Safripol was advised on the sale by the Valence Group, according to a separate statement.

Furniture chain Steinhoff raised its stake in KAP in 2012 in exchange for industrial assets. It’s since moved on to bigger deals, including an agreement this week to buy Mattress Firm Holding Corp. of the U.S. for about $2.4 billion.

© 2016 Bloomberg L.P

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