Bell Equipment Company SA (BECSA) has reached agreement in principle to acquire the business of Matriarch Equipment CC.

Matriarch designs and manufactures a range of material handling products used predominantly in the forestry and sugar industries across local and international territories.

Bell said the intellectual property (IP) of the products designed by Matriarch is aligned to the broader strategy of the company to enhance IP ownership and to provide niche product solutions in the forestry and sugar industries.

In terms of the transaction BECSA will acquire all the assets of Matriarch consisting of the inventory, the value whereof will be finalised at an inventory count to be conducted on or about January 31, 2019; the operating assets to the value of circa-R1.3 million; the value of the IP which was determined by valuing the business of Matriarch on a discounted cash flow basis; and take on the employees of Matriarch.

BECSA will pay an initial consideration of R3.8 million for the Matriarch IP plus a performance-based consideration (PBC) based on future sales performance of Matriarch Products, retrospectively per quarter for five years. In addition to the five-year time limit, the PBC has a monetary cap of R15 million.

The finalisation announcement is expected on or about February 1, 2019.