KENYA – Haco Industries, a Kenyan personal and home care products manufacturer, has received an additional payment of US$2.29 million (KSh273 million) from French conglomerate Société BIC as part of a transaction that started in 2018, reports Business Daily.
Société BIC acquired the BIC stationery, lighters, and shavers franchise from Haco which was to be paid over the years, with most of the deferred compensation representing the cost of acquiring inventory, raw materials, and equipment among other items.
The French multinational says it wired Haco an additional US$2.29 million (KSh273 million) in the year ended December 2021, bringing the cumulative payouts to the Kenyan company to US$13.67 million (KSh1.6 billion).
Haco was paid an initial US$6.29 million (KSh749 million) in the deal which was sealed in 2018 in a transaction that saw the owner of the BIC brand take control of the production and distribution of the products in the local and regional market.
The multinational later announced that Haco is entitled to an additional deferred payment amounting to US$9.89 million (KSh1.1 billion). This indicates that there is a pending amount of €2.95 million (KSh297 million) due to Haco.
The additional payments are meant to compensate Haco for the capital commitments it had already made in the business.
The sale of the BIC division left Haco to trade in the home care and hair care line of businesses whose brands include Sosoft fabric softener and Miadi shampoo.
The deal brought to an end 40 years of Haco’s BIC franchise that saw its manufacture and sell branded stationery, lighters, and shavers.
The BIC buyout took away one of Haco’s major revenue lines, with the BIC brand of pens having the largest market share in the regional stationery industry.
BIC said the transaction was in line with its continued growth strategy in Africa, with the multinational attracted by a positive outlook for the stationery market.
Besides their high quality, sales of BIC pens have been helped by strong relationships with large customers, including companies that order branded units.