amecor: the hunter becomes the hunted

10 June 2016

By: Marc Hasenfuss Source: Business Live

In just a few days, small security technology group Amalgamated Electronic Corp (Amecor) has gone from hunter to hunted.

Last week Amecor, at the release of strong year-to-end-March results, hinted that its strong cash-flow generation would not only underpin dividends and share buy-backs but also allow the company to evaluate acquisitions.

Yet the ink had hardly dried on the financial commentary before Amecor advised shareholders that it had received, from a third party, a non binding expression of interest to buy out the company.

There are only a handful of security companies listed on the JSE — but these specialist services are considered a sweet spot (due, sadly, to a rising crime rate) in a moribund economy.

Developments have spurred on Amecor’s share price, with newly formed investment counter Stellar Capital Partners and vehicle security specialists like Cartrack and MiX Telematics cited as possible suitors.

Amecor holds a market capitalisation of less than R300m, which means any significant industrial or investment player could buy out the business without leaving a major dent in the balance sheet.

Amecor’s largest shareholders are Westbrooke Capital (18.7%), Integrated Capital Management (11.5%) and William Kirsh (11.46%).

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