Johannesburg - Imprial Holdings' acquisition of industrial equipment supplier Goscor, announced on Wednesday, is one of the first steps in the transport company's plans to bulk up by as much as a fifth of current market capitalisation. The group's CEO Hubert Brody announced in February that Imperial's slimming-down period was over and the company would be willing to make an acquisition, or a series of acquisitions, to the value of R4bn or 20% of the group's market cap at the time. However, Wednesday's acquisition may have surprised some market watchers who could have been expecting Imperial to expand further into logistics, identified as a key growth priority.

Earlier this year, Imperial management indicated that the acquisition would have to be earnings enhancing with "much certainty" and would not present a drain on the group's capital. According to the group's most recent financial statement (end-December 2009), Imperial's balance sheet showed R2.7bn in cash and cash equivalents as well as R9.5bn worth of unused funding facilities. Imperial has not disclosed the size of the acquisition, which was concluded under its Associated Motor Holdings (AMH) subsidiary. AMH is reponsible for importing and distributing entry-level East Asian vehicles such as Tata, Hyundai and Kia into the country.