Who's doing what this week in the South African M&A space?


Who's doing what this week in the South African M&A space?

Published Date: 2020-11-13 | Source: DealMakers | Author: Marylou Greig

Who's doing what this week in the South African M&A space?

Exchange Listed Companies

  • Adcorp, has announced a partial unwind of its 2013 BEE deal due to the significantly decreased value of its share price resulting in the current transaction being materially underwater. In terms of the new deal, the company's new strategic B-BBEE partners will subscribe for a 35.42% stake of newly incorporated wholly-owned SA subsidiary Adcorp Group SA. The new B-BBEE partners will each hold the following - Quest Strategic Partners 7.31%, Simeka 4.15% and AEBT 3 (comprising Adcorp female employees) 23.95%. As part of the unwind, Adcorp will repurchase 35% of the issued B shares held by Wiphold and 25% held by Simeka. AEBT 2 (employees not participating in the new transaction) will be the only holders of B shares which they will hold until the unwinding of the structure in 2023. The transaction will increase the company's SA subsidiaries BEE ownership to c.51%, and its black women ownership to at least 30%.
  • Pan African Resources has entered into conditional sale-of-shares agreements to acquire from Mintails South Africa, which was placed in provisional liquidation during 2018, Mogale Gold and Mintails SA Soweto Cluster for a maximum of R50 million. The sale agreements are not inter-conditional.
  • Imperial Logistics which teamed up with US-based venture capital firm Newtown Partners in March this year to launch a corporate venture capital fund focused on disruptive startups in the logistics industry, has invested in logistics startup Lori systems. The Kenyan startup which provides supply chain management solutions to cargo owners, ensuring flexibility reliability and cost savings has operations in Uganda, Rwanda, South Sudan and Nigeria. The size of the funding was undisclosed.
  • Advanced Health has disposed of its stakes in seven hospitals situated in the Western Cape and Gauteng to Samaritan, a joint initiative between Carican Financial Services, the Pivotal Group and Palesa Capital. The transaction consideration of R170 million has an earn-out potential of an additional R30 million. The disposals are the result to a restructuring process entered into by the company to simplify its structure and reduce operational and overhead costs. In another transaction, the company's 56.6% owned subsidiary Advanced East Rand Day Hospital was sold to 52 Olivia Road Hospital for a maximum consideration of R12,8 million.
  • Richemont, together with Alibaba Group, has announced a global strategic partnership to provide luxury brands to the Chinese market. As part of the deal, Richemont will invest (Alibaba will also invest on the same terms) $300 million in private convertible notes issued by Farfetch, due in 2030, and a further $250 million in Farfetch China for a 12.5% equity stake. Both companies will have the option to purchase a further combined 24% of Farfetch China after the third year of the joint venture's formation.
  • Middle East Diamond Resources, has entered into a Heads of Agreement with Chun Can Capital to acquire 100% stake in Casa Mining which holds the Akyanga gold deposit located in the South Kivu Province of the Democratic Republic of Congo. The acquisition of Casa Mining represents the first acquisition in the strategy of developing MEDR into a gold exploration and mining company. In a second announcement this week, the company has acquired, at a cost of US$200,000, a 50% stake in Stepford which owns a Prospecting Licence in the Asutifi district of the Brong Ahafo region of Ghana. MEDR will manage and fund the gold exploration programme via a loan account of $3 million. It is anticipated that the Stepford prospecting licence will be converted to a mining licence by April 2022.
  • Hyprop Investments with a 75% stake and Attacq holding a 25% interest, have announced the disposal of their stakes in Ikeja City Mall in Nigeria. Actis via its Africa Sustainable Real Estate Income Fund and West Africa REIF has acquired the asset for an aggregate disposal value of $115 million.

Unlisted Companies

  • EXEO Capital and Stellenbosch Graduate Institute have jointly acquired the Pearson Institute of Higher Education which consists of 12 campuses across South Africa with the aim of expanding access to higher education across the country and in time to other African countries. Financial details of the transaction were not disclosed.
  • Impact Oil & Gas, the African-focused exploration company, has entered into an agreement with BG International, a subsidiary of Royal Dutch Shell for the farm-out of a 50% working interest and operatorship in the Transkei and Algoa exploration right, offshore South Africa. Shell also has the option to acquire an additional 5% working interest.
  • Emerging Energy, a German private equity firm, has acquired a stake in South African clean energy company Sustainable Power Generations. The local company operates across the continent under its two divisions SustainPower and SustainSolar in the growing gas-to-power industry and off-grid solar sector in the energy markets in sub-Saharan Africa. Financial details were undisclosed.

DealMakers is SA's M&A publication.

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