By Martin Vedris
TOTTENHAM, VIC: GUD Holdings Ltd, the Australian parent company of the Sunbeam appliance brand, today announced the opportunistic sale of Victa Lawncare business but managing director Ian Campbell hinted at the possibility of future acquisitions.
GUD has announced the sale to the USA-based Briggs and Stratton Corporation, subject to approval of the sale by the Australian Competition and Consumer Commission (ACCC). The sale is expected to be completed, and approved, by 30 June.
According to GUD, Victa was formed in Sydney in 1952 and has soled over seven million lawnmowers during that time. The sale by GUD was not planned, according to GUD Holdings managing director, Ian Campbell.
“Briggs approached us a few months ago and it made good strategic sense for them and it made some sense to us,” Campbell told Current.com.au today.
Proceeds from the sale are expected to be around $AUD 23 million and according to a statement from GUD Holdings, this exceeds the book value of the business.
Campbell said the windfall could be used for some future company acquisitions, although he declined to say what they may be.
“We have a couple of things we’re looking at at the moment,” Campbell said. “It’s way to early to comment but one of the things is consumer and the other is industrial.”
Despite prices of manufacturing increasing in China, where Sunbeam products are made, GUD said it expects to report EBIT growth at the top end of its 10 to 15 per cent prediction when full results for the year ended June 2008 are announced in late July.
However, Campbell said that it was the strength of the Australian dollar that has taken the sting out of the rising cost of manufacturing in China, so far.
“Costs have very definitely increased in China but they’ve been masked by the strength of the Australian dollar,” Campbell said.
“If we had a consistent Australian dollar at $0.85, there would have been massive price increases put into the marketplace.
“If the currency drops back, there is no option. The magnitude of the [price] increases that we’ve seeing coming out of China in the last year, you just cannot possibly absorb.”