OHKI has entered into an exclusive Heads of Agreement to purchase Stax Electrical, an acquisition likely to net OHKI a combined annual revenue of over $7 million and healthy profits.
Stax Electrical is an 18-year old NSW business that supplies large corporations in the insurance industry as well as pubs, clubs and hotels with new for old replacement products/
OHKI, a 100 percent Australian owned electronic reseller, said the acquisition is highly strategic as it allows it to buy “name branded” electronics at a 15 percent larger margin and will expand its product range. Gross Margins on branded products are currently at 25-30 percent and will increase to 35-40 percent plus additional rebates upon trophy sales targets being met, provided by supplier’s further increasing gross margin.
OHKI said it will acquire Stax Electrical at a competitive price and with a minimal upfront outlay, with the bulk of the business in cash and shares in OHKI Limited. The cash component will be funded by a new debt facility from one of Australia’s largest debt providers. The facility has been pre-approved and is subject to a due diligence of Stax Electrical and OHKI Limited.
Closing of the acquisition is expected in the next 8-10 weeks.
According to OHKI Chairman Siimon Reynolds, if the transaction closes successfully the financial projections for the company will increase significantly.
“Stax is a key acquisition. It’s an excellent company in it’s own right, but the synergistic advantages when joined with Ohki’s online operation are formidable.”