South Africa private equity firm Ethos has sold Johannesburg-based Brandcorp Holdings, a distributor of industrial and consumer products, to the Bidvest Group. No financial terms were disclosed.
Ethos confirms that following a competitive sales process it has entered into an agreement with The Bidvest Group Limited which, subject to the fulfillment of certain conditions precedent, will result in the sale of Brandcorp Holdings (Proprietary) Limited for an undisclosed sum.
Ethos Fund V acquired and delisted Brandcorp in 2007, with the aim of accelerating growth and strategically re-positioning the company.
Together with management, Ethos has achieved this goal by actively enhancing Brandcorp’s strategy, operations, leadership capacity and finances. These activities have resulted in:
· Various strategic acquisitions including Renttech and Burncrete
· Introduction of a BEE shareholding facilitated by the DEG, plus Sphere Private Equity
· Capacity expansion following warehouse development
· Management team enhancement
· Comprehensive strategic review of the businesses in a major division to position for sustainability in a changing environment.
Furthermore, Ethos successfully recapitalised the business in 2010 via a R750m high-yield bond placement.
“Such initiatives reaffirm Ethos’ ability to identify attractive opportunities and work with management teams to create long-term value that is predominantly derived from earnings and revenue out-performance,” commented Ethos partner, Shaun Zagnoev. “Our ability to grow companies, even during challenging times, has made Ethos the partner of choice for successful management teams who have a desire to explore corporate change and growth.”
The sales process was coordinated by Rand Merchant Bank Corporate Finance and Webber Wentzel.
Ethos is a leading South African private equity investor.
The firm was instrumental in establishing the asset class in the region, concluding the: first buy-out (1984); first public-to-private deal (1992); first BEE deal (1994); and, first international fund raising (1996).
Ethos is currently investing Ethos Fund VI, with R9 billion of committed capital.
Ethos distinguishes itself in the local market by combining financial discipline with value-enhancing strategies, in partnership with portfolio company management teams. This approach has resulted in an enviable track record of superior returns over our +30-year history.
To date, Ethos has made 104 investments and successfully exited 91.
Ultimately, we build better businesses.