Kuala Lumpur-headquartered trading conglomerate Sime Darby (BMB: 4197) of Malaysia has conditionally acquired the privately held automotive and construction machinery dealer Gough Group of Christchurch, New Zealand.
Financial details of the deal were not disclosed.
Gough says the sale follows a 2018 strategic review. Commenting on the sale, Gough Group Chairman Keith Sutton said, “We are confident that, under Sime Darby’s ownership, the outlook for the business will be strengthened, service to customers enhanced and opportunities for our employees improved. Although it is sad to see the end of the almost 100-year legacy of Gough family ownership, all our stakeholders should be excited about the future direction of the business.”
Sime Darby noted in a statement that Gough owns the Caterpillar dealership in New Zealand along with interests in the transport and materials handling sectors in both Australia and New Zealand. Gough currently employs about 950 people across a network of 50 locations in Australia and New Zealand.
Commenting on the transaction, Sime Darby CEO Dato Jeffri Salim Davidson said “The Gough Group transaction, which would be the largest for Sime Darby Berhad since the pure play restructuring exercise in 2017, provides a rare opportunity for us to enhance our relationship with Caterpillar, and gain exposure to the construction and forestry sectors in New Zealand, further reinforcing Sime Darby Industrial’s footprint in the Asia Pacific region.”
Davidson continued, “The Gough Group’s transport and material handling portfolio will complement Sime Darby Motors’ commercial truck business in New Zealand, enable growth in after-sales operations and broaden our suite of franchises, essentially strengthening our position in Australasia.”
The sale is conditional on approval from New Zealand’s Overseas Investment Office, which gives the green or red light on all large overseas investments in New Zealand.
Sime Darby added that the transaction will be fully funded by bank loans and that the deal is expected to be completed by September 30, 2019.
Tracy Gough founded “Gough, Gough & Hamer” in 1929 and secured the Caterpillar dealership in 1932. Today, Gough has three main businesses: machinery and equipment financing; Caterpillar-branded equipment sales and rentals (power systems, excavators, wheel-loaders, machine attachments and so on); and transport & materials handling.
Gough Transport & Materials Handling consists of seven sub-divisions including: industrial machinery hire, distribution of the Palfinger range of heavy lifting equipment in Australia and New Zealand; distribution of Hyster-brand lifting machinery (container stackers, forklifts and so on). The division also includes “TWL” which provides parts and equipment to New Zealand’s commercial trucking industry. Gough Transpecs provides supplies to commercial trailer manufacturers and truck body builders across New Zealand.
As a privately held company, Gough is not required to divulge its financial statements. However, Sime Darby noted that Gough grew its revenues by more than 18 percent to NZ$540 million (US$349.2 million) from the previous year. Growth was driven by improvements in sales in the Caterpillar and the transport and materials handling businesses.
About Sime Darby
Sime Darby Berhad was founded in 1910 in Malacca, Malaysia, by William Sime, Henry d’Esterre Darby, and Herbert Milford Darby. The business was originally an agent and secretary for local rubber plantations before later diversifying into timber, preservatives and vehicle insurance. Today, Sime Darby has far outgrown its origins and is now a multinational conglomerate with operations in the industrial, automotive, logistics, healthcare, insurance and retail sectors.
Sime Darby Motors is active in nine markets in the Asia Pacific region and sells more than 80,000 vehicles from a portfolio of more than 30 automotive brands. It specializes in the sale of luxury vehicles.
Sime Darby’s logistics division is the primary operator of Weifang Port in Shandong Province, China. It also owns three river ports, also in the same province. According to China’s Ministry of Transport, Weifang Port handled 25.4 million metric tonnes of cargo in the first half of the year. A metric tonne is 2,204.6 U.S. pounds. It has also handled 210,000 twenty foot equivalent units of shipping containers.
Sime Darby’s revenue and profits
In its 2018 annual report, Sime Darby revealed that, as at June 30, it had generated group revenues of 33,828 million Malaysian Ringgit (US$8.12 billion) but had generated considerable operating expenses of 33,063 million Ringgit (US$7.94 billion). After all other expenses and tax, the group’s profit for the financial year was 2,063 million Ringgit (US$495.12 million).
As of the June 30 reporting date, the company employed 20,249 people: 8,119 were employed in its industrial division; 10,403 were employed in its automotive division; and 952 were employed in its logistics division.
Sime Darby is listed on the Bursa Malaysia, the national stock exchange.
FreightWaves contacted Sime Darby for further details but has not yet received a response.