History
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Formation
In 1891, just fi ve years after the discovery of gold on the Witwatersrand, J Hubert Davies started an industrial equipment supply business in Johannesburg. By the turn of the century, the business was a major player in the
distribution of mechanical and electrical industrial products. In 1917 it was converted into a private company, which facilitated the introduction of senior managers as shareholders and directors. |
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First JSE listing
In September 1938, Hubert Davies and Company Limited listed on the Johannesburg Stock Exchange. It delisted almost four decades later, in 1977, when it became a
wholly owned subsidiary of Blue Circle Limited. The United
Kingdom-based industrial group had already acquired a substantial interest in the company three years earlier. |
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Expansion and decentralisation
In the 1970s, Hubert Davies expanded its product offering and branch network to extend across southern Africa. Then a strategic decision was made to specialise by product and activity, in order to provide more focused
customer service and achieve improved market penetration. Following on from this, a management philosophy of decentralising decision-making and responsibility was introduced. This philosophy is still in place today. |
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Second JSE listing
In line with the specialisation trend amongst businesses at that time, Hudaco Industries was established as a separate autonomous company in 1981, owning the group’s distribution businesses. In May 1984, with banks as
partners, management, under the leadership of Bruce MacInnes, acquired control of Hudaco Industries from Blue Circle, in what was then the largest South African private equity leveraged buyout. On 14 November 1985, Hudaco
Industries Limited listed on the Johannesburg Stock Exchange at a subscription price of R1,50 per share, with a market capitalisation of R29 million. Several large acquisitions followed, including listed companies Frencorp, Valard
and Elsec. |
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B-BBEE shareholding and growth
In 2007, the group sold 15% of the majority of its operating businesses to black, previously disadvantaged shareholders as part of a B-BBEE initiative. This 15% is now owned for the benefit of Hudaco’s black employees. The 2000s also saw the group’s annual turnover increase to R4 billion. |
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Diversification to reduce dependence on mining and manufacturing
This decade saw Hudaco make several significant acquisitions, including Filter and Hose Solutions, Global Communications, the Dosco group, MiRO and Partquip. The latter serves the automotive aftermarket and is now the group’s largest single business. Many smaller businesses have also been acquired. This acquisition strategy included a strong initiative to diversify the revenue base, thereby reducing dependence on the group’s traditional core markets of mining and manufacturing, which experienced very difficult trading conditions and in which growth was elusive for an extended period. This boosted contributions from the automotive, data networking, security and alternative energy sectors. |
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A quality diversified industrial distributor
Today, with a proud history of 130 years since J Hubert Davies, saw the long-term business potential of the initial gold rush, the group remains true to its roots. The group now employs nearly 3 800 people and has a market capitalisation of about R4.2 billion. With the contraction of mining and manufacturing in South Africa in the past few years, Hudaco’s diversification strategy has served it well and 60% of its profits are now derived from sectors where activity is more closely aligned to levels of consumer spending. Its shareholders include many blue-chip players in the South African investment industry and black employees now have an equity interest in the main operating subsidiary. |
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Early instrument for measuring electrical current,
supplied by Hubert Davies and Co |
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