Mauritian conglomerate Rogers Group says it acquired Rongai Workshop and Transport Limited at a discount of Sh113.6 million, recording an immediate gain from the transaction.
The buyout of the trucking company was implemented through General Cargo Services Limited, a subsidiary of Velogic Logistics, which is in turn owned by Rogers.
“During the semester that ended 31 December 2022, Velogic completed the acquisition of a leading transport company in Kenya,” Rogers said in a trading update about the deal.
“A gain on bargain purchase of 38 million Mauritian Rupees (Sh113.6 million at current exchange rates) has been realised on this transaction.”
A bargain purchase occurs when a company is bought at a price that is less than the fair market value of its net assets. The difference is recorded as a gain.
Rogers has not yet revealed the amount it paid in the transaction but it is expected to be in hundreds of millions of shillings.
Rongai Workshop and Transport Limited has tea companies among its top clients and runs a fleet of 160 vehicles employing 270 people. It reported sales equivalent to Sh220 million in the quarter that ended in December 2022.
The deal saw the exit of the Vanessa Evans family, which founded the logistics firm in Rongai in 1947.
The Competition Authority of Kenya has approved the buyout of the trucking firm, saying it will not hurt competition in the local transport sector.
“Since the target’s market share is low, the post-merger market structure and concentration will not significantly change to occasion any competition concerns,” the regulator said in a statement.
“Additionally, the merged entity will face stiff competition from other players controlling 97 percent of the market. Therefore, the proposed transaction is unlikely to lead to a substantial lessening of competition in the relevant market or raise any competition concerns.”