Scott Technology wants to accelerate its growth plans, which could include bigger acquisitions, once the Overseas Investment Office signs off on Brazilian meat processor JBS taking a majority stake in the industrial automation firm.

The Dunedin-based company has unveiled a potential purchase of a German engineering firm it competes with in the appliance manufacturing space, which managing director Chris Hopkins said it will fund from its existing balance sheet. Scott held cash and equivalents of $7.3 million as at Feb. 29, which was swelled by a $9.9 million operating cash inflow in the six months through to the end of that month.

The acquisition would give Scott a foothold in Europe where it's starting to grow its customer base, and continue on a buying spree that's seen the company's revenue treble since 2008.

The pending deal comes as Scott is waiting on OIO approval for JBS Australia to take a 50.1 per cent stake in the firm before getting High Court sign off on the scheme of arrangement. Scott lodged its application in September last year, and expects to get an answer next month.


Once JBS gets approval, Scott will access $41 million of new capital from JBS and existing shareholders who participated in a rights issue, which Hopkins said will let the company speed up expansion.

"Obviously acquisition will need to beef up and maybe increase the size of what we're looking for," Hopkins told BusinessDesk. "At the moment there's a natural cap on the size of acquisitions we can undertake in order to fund and absorb them. With additional capital behind us it makes it easier."

Because JBS's shareholding hasn't been finalised, Scott needed to keep its incoming investor abreast of the German acquisition, and also an increase in the first-half dividend which will use up imputation credits that would otherwise have been lost on the ownership change.

"We've got a very good relationship with JBS, so they're up to date with our strategy and what we're doing," Hopkins said. "JBS aren't there to dictate business and the way that we operate, but to add to it. So they're very happy for us to carry on with our strategy and plans for the business."

The shares rose 3.6 per cent to $1.45, above the $1.39 price JBS is paying for control of the company.