The $81million sale follows last week's announcement of Hellaby's $45million purchase of maintenance services supplier TBS Group.
Hellaby's chief executive Alan Clarke said yesterday the Equipment Group was New Zealand's leading heavy equipment sales, servicing and forklift rental business.
He said following the unsolicited offer of $81million from private equity company Maui Capital Aqua Fund, the board had accepted the deal, which would be settled "over the next few months''.
The sale was expected to realise a capital gain on book value of around $30million, after costs and working capital adjustments, Mr Clarke said.
Sale proceeds would first be used to reduce debt and the remainder was earmarked for further investment into Hellaby's core automotive and resource services groups, he said in a statement.
Hellaby shares were up almost 9% to $2.69 following the announcement yesterday.
Craigs Investment Partners broker Peter McIntyre said the $81million purchase price was in line with Craigs' valuation for the business.
However, Mr McIntyre noted that the sale of the Equipment Group did remove a business with ``relatively stable earnings'', when compared with the target sector of contract resources.
"The announcement does fit with management's stated strategy of focusing on segments which it considers to be `core' to the group, automotive and resource services,'' he said.
He noted Hellaby's footwear division, which includes Hannahs and Number One Shoes, continues to be a non-core business.
In May, Mr Clarke said the footwear group continued to struggle in a soft and difficult retail environment and several options for the group were under investigation.
Yesterday, he said: "As previously advised, footwear is considered non-core and will be divested at an appropriate time.''
In late May, Hellaby's downgraded its earnings forecasts, blaming ongoing volatility and challenging conditions in the international oil and gas market for the revised profit figures.
The company at the time expected a consolidated operating profit for the year ended June of $43million to $47million, down from $59.1million last year.
Earnings before interest and tax would be between $28million and $32million, down from $44.7million last year.
Mr Clarke said Hellaby's had identified automotive and resource services as its core business groups.
"Both sectors offer considerable development, scale and investment potential and will be Hellaby's primary focus for acquisition and organic growth,'' he said.
The global opportunity for Resource Services in the oil and gas market alone was estimated at more than $200billion a year.
Mr Clarke said Hellaby's Contract Resources business would be the cornerstone of the group. Other acquisitions, such as the $45million acquisition of TBS Group, were announced earlier this month.
"We believe that, together, these two groups [automotive and resource services] have the potential to deliver over $1billion in revenue with attractive profits in five years' time,'' Mr Clarke said.
The 45-year-old TBS Group provides maintenance services to a wide range of New Zealand clients in the oil and gas, agricultural, construction and power generator markets, and has annualised revenue of about $85million.
