Imbalie Beauty – which makes skincare products and runs nails salons – plans to buy two engineering and construction companies operating in SA and Botswana for just under R200 million, it told investors on Tuesday.
But it will not become some strange hybrid beauty-and-engineering company, CEO Esna Colyn tells Business Insider South Africa.
"I doubt we could get that past investors," she jokes.
Instead Imbalie will sell its beauty brands, including the 38-year-old Placecol skincare range and 35-year-old Dream Nails Beauty salons, to return to being a private company.
"We are too small to be listed in the current environment," says Colyn.
At the end of the planned series of transactions, what is now Imbalie will own Wepex Geotechnical, an engineering company with operations in South Africa and Botswana, as well as unrelated company Makgarapa Products, which operates in Botswana's Orapa diamond fields.
The transactions values Wepex at R108 million and Makgarapa at the equivalent of R88.8 million.
After selling its beauty brands, the listed vehicle will change its name to Wepex.
Colyn would not say how the purchase of the beauty brands from the listed vehicle would be funded.
The strange transition from beauty to engineering will draw a line under a strange couple of months for Imbalie.
At the end of May CEO Brent Kairuz suddenly resigned, after just over three months in the job. The company said his resignation had been for "personal reasons", and Kairuz would not elaborate.
During Kairuz's brief term, chief financial officer Jaques Rossouw resigned – after five months in the job. Rossouw told Business Insider he had left by "mutual decision" with Kairuz.
With Kairuz gone, long-time CEO Colyn went back to that job.
Imbalie has since missed the deadline to publish its financial results; it would release those numbers only once it had resolved a liquidity crisis, it said.
The company listed on the JSE's AltX in 2007, but recent conditions has shown it is not suitable to be a public company, says Colyn.
"The honest truth is that market conditions are tough in our industry in particular. Secondly, we all know Long4Life came in very aggressively with their Sorbet transaction and how they are positioning it in the marketplace."
Long4Life is a JSE-listed company headed by the legendary Brian Joffe. Last year it paid R116 million for the Sorbet line of beauty therapy salons, and it has promised to expand fast.
In mid-2017, Imablie disclosed in its last annual report, it came close to a deal to sell "the greater part of the assets" of the company for R25 million to CAVI Brands, which distributes many beauty products including the Dermalogica line.
The deal fell through.