Jevic offers to buy Vehicle Inspection NZ, valuing it at $4.1m
Jevic New Zealand, a company that pre-vets imported used vehicles, offered to buy all the shares of Vehicle Inspection New Zealand, valuing it at $4.1 million.
Jevic is offering $1.65 a share for VINZ, the vehicle inspection company that trades on the Unlisted platform. The offer represents a 10 percent premium to VINZ's last trading price of $1.50.
Jevic and associated parties have already acquired 463,000 shares in VINZ, amounting to about 18.5 percent of the company. It intends to dispatch its offer for the remaining shares early next month.
The offer comes as the government is reviewing the whole system of annual vehicle registrations, WOFs, COFs and transport service licensing with a view to lifting efficiency while cutting costs. That could have a detrimental impact on VINZ's business.
One option is to extend frequency periods for warrants and other services, which VINZ said in its annual report in August would reduce the market size, prompting the company to put any expansion plans on hold.
"We believe the inspection environment will be a challenging one if new regulations take effect and that the time is right for consolidation," Jevic chief executive Euan Philpot says in a statement.
Among VINZ's services is the completion of vehicle entry certification for the NZ Transport Agency and it currently has about 40 percent of that work, he says.
The Jevic group provides pre-shipment inspections in Japan and the UK and says it is the country's largest biosecurity vehicle inspectorate, with about 85 percent of that market.
Jevic will keep current VINZ general manager in place to ensure continuity.