Micor has the goods in the moving business
IN THE business of haulage, it used to be that the guys who had the trucks called the shots. Now nerd control by the computer guys is the name of the game.
This is Micor chief executive Mark Kaplan's view. "It's a coming reality that the people who own the clients won't have to own trucks. They'll outsource that aspect of the supply-chain management."
This week, Micor confirmed plans announced a month ago to pass on its shares in travel and tourism group Tourvest, at the same time welcoming aboard a new 30% shareholder, Gerald Rubenstein's investment trust Vestacor. Holders of Micor will be issued with 3.13 Tourvest shares, currently trading at 151c. Micor is 845c, and will retreat to around 370c after the unbundling. This will give it a market capitalisation of less than R120-million - a little small to Kaplan's eye and hence the introduction of Vestacor with capital now and as a source of funding for the future. Vestacor will subscribe for 10.5-million Micor at 350c to inject R37-million. Part of the deal includes Kaplan exchanging a third of his Micor holding for Vestacor and a seat on the Vestacor board. Who introduced whom?
"Gerald was on the Micor Industries board for nearly 20 years, until 1991, so he has a good insight into the group and the culture. By the same token, we know him well enough to see that he can add strategic value to our intended logistics business," says Kaplan.
Rubenstein was until recently a member of rival transport group Super Group's board.
Kaplan says Micor's original travel business, which was sold into Tourvest last year for the equity stake, has grown into a large investment which is to be unbundled as Micor no longer makes management input. "It leaves us with freight and related industrial handling businesses. It is Micor's vision to develop into the market leader in outsourced logistics solutions or supply-chain management."
Kaplan says today's trend is for companies to outsource activities outside their core. "We want to take the strategic high ground and enter partnerships with our clients. We will handle everything to do with the moving of goods."
Micor is making selected acquisitions in areas allied to the freighting core, such as air-freight space trader Cosmotrans and Power Bulk, which replaces the process of moving bulk products in containers, both locally and internationally.
Post the unbundling, Micor forecasts earnings a share of 44c, giving a price: earnings ratio of between eight and nine. "We also expect to achieve earnings growth of 35% a year through organic and acquisitive growth," says Kaplan. "Having Vestacor aboard gives us greater muscle to make acquisitions."
Assuming delivery of the goods, Micor looks like an exceptionally cheap opportunity for investors to get aboard a company with a future.