Kagiso buys into UK firm Servest
by SAVIOUS KWINIKA
JOHANNESBURG, (CAJ News) – KAGISO Tiso Holdings, the South African investment-focused firm, has acquired 51 percent of British-based Servest Group in a R4,5 billion transaction.
Kagiso Tiso Holdings’ Group Chief Executive Officer, Vuyisa Nkonyeni, said the deal would culminate in the Black Economic Empowerment (BEE) company assuming a Pan African stance with a huge presence in the continent.
The acquisition also confirmed Kagiso Tiso Holdings as one of the largest black-owned companies in the continent.
“I’m really excited by this partnership because Servest Group management have demonstrated value in their company. Servest Group have a track record to deliver in the service sector, a positive development that excites us at Kagiso Tiso Holdings.
We are a leading Pan African brand, and they are also a brand in their sector making our partnership good investment for Africa,” said Nkonyeni.
The Servest investment is set to offer a compelling proposition, which Kagiso Tiso Holdings says was consistent with its strategy as a business with significant presence in South Africa, the United Kingdom (UK), and the rest of the continent.
The new merger is seen as a boost to Kagiso Tiso Holdings’ diversity investment.
Economic analysts believe the two companies’ investment into Africa where the continent has multi-currency earnings would stir their growth.
“This transaction demonstrates clear delivery against KTH’s strategy of acquiring meaningful or major stakes in fast growing companies which are supported by strong management teams and have good exposure to African market opportunities.
“In the South African market, we will identify investments that will afford us significant influence or control alongside likeminded partners,” Nkonyeni said.
The transaction makes Servest the largest black-owned facilities management company in Africa, strongly positioning it to expand its footprint across the entire continent.
Nkonyeni said Kagiso Tiso Holdings was targeting the African investment in three geographic regions comprising West Africa, East Africa and South Africa.
“In West Africa, we target to do business in Ghana and Nigeria while in East Africa we are targeting Kenya, Ethiopia, Uganda and Tanzania,” Nkonyeni said.
Servest Group Chairman, Kenton Fine, said the merger with Kagiso came at a time Africa was becoming an investment opportunity for the world.
“We have enjoyed a very successful and long standing relationship with our existing shareholders, RMB Corvest and Shalamuka, and are delighted at the prospect of partnering with a professional organisation of the calibre of Kagiso Tiso Holdings.
“With similar values entrenched in both organisations, we look forward to embracing the additional experience and knowledge that KTH will bring, further underpinning our continued ambitious growth strategy into the future,” said Fine.
Servest Group Chief Executive officer, Kevin Derrick, said the new partnership was set to conquer Africa.
“This deal means that Servest is now 51 per cent black owned, but it represents so much more than just an empowerment transaction.
“This partnership brings with it significant opportunities for future growth, expansion and job creation. Our Group and Kagiso Tiso Holdings have common philosophy, style of business, and strategic vision for growth.
“As we grow into Africa, we select our client very carefully in order to minimise the risks. We definitely see Africa as potential investment opportunities for the new group,” said Derrick.
He said the partnership with Kagiso Tiso Holdings would maximise their growth since the South African company had already established itself in some parts of West Africa where Kagiso Tiso Holdings invested a whopping R40 billion into Fidelity Bank of Ghana.
Kagiso Tiso Holdings boasts numerous investments where it offers cleaning services, parking, catering, hygiene, landscaping to clients such as Transnet, Netcare Group, Anglo-Platinum, Debswana, Sasol, Sainsbury, British Broadcasting Corporation (BBC), and the UK’s House of Parliament.
Kagiso Tiso Holdings Chief Investment Officer, Jacob Hinson, said they were delighted with the new partnership.
“Our investment strategy seeks to achieve active participation in fewer, prominent investments, with strong management teams that will drive growth across the continent.
“Servest is a unique investment that meets all our criteria. We were therefore able to execute this transaction on pure commercial terms without any external or vendor facilitation with an equity cheque of approximately R1 billion. We look forward to working with our new partners to create a truly global facilities management business,” Hinson said.
The two groups have similarity in various ways. Kagiso is one of the largest Pan African investment holding companies with an investment portfolio of market leading companies across its chosen sectors and geographies.
“On the other hand Servest Group boasts leading facilities management services, to over 6500 clients across more than 24 000 sites throughout Africa and the United Kingdom.
Servest Group was founded in 1997 with an integrated operating model provision of extensive operational support, infrastructure, and international best practice within the public and private sectors.
– CAJ News
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