South African buyout firm Ethos Private Equity is exiting its investment in sporting goods retailer Holdsport via a $170 million listing on the Johannesburg Stock Exchange next month, Reuters reported. Ethos paid 681 million rand ($99.14 million) for a majority stake in the company in 2006.
(Reuters) – South Africa’s Ethos Private Equity will exit its majority investment in sporting goods retailer Holdsport through a $170 million listing on the Johannesburg Stock Exchange next month.
The deal is the latest to highlight the increasing activity of private equity firms on the African continent.
Both international and Africa-focused private equity houses are looking to do more deals in sub-Saharan Africa, where consumer spending is rising quickly, but many capital markets remain illiquid.
Ethos, one of South Africa’s leading private equity firms, paid 681 million rand ($99.14 million) to acquire the retailer, including its debt, in a 2006 buyout together with management.
Existing shareholders will sell up to 30 million shares, or 70 percent of the company, in a private placing before the listing next month, Holdsport said in a statement.
The majority of that private placement will come from Ethos selling the shares it acquired in the buyout, according to information on the private equity firm’s homepage.
The stake will be sold at between 31 to 39 rand per share, or up to 1.17 billion rand ($170 million), meaning Ethos could stand to roughly double its investment.
Holdsport, which runs about 50 sporting goods and outdoor stores across South Africa, said the offer would be open to some institutional investors in South Africa and overseas.
Ethos and another private equity firm, Actis, are looking to sell their combined controlling stake in South African equipment repair firm Savcio Holdings, a person familiar with the matter told Reuters this month.
General Electric , Siemens AG (SIEGn.DE) and U.S. private equity firm Carlyle Group are among the bidders, the source said.
Washington D.C.-based Carlyle said in March it was entering sub-Saharan Africa, targeting investments in consumer goods, financial services, agriculture and infrastructure.
The offer price for Holdsport will be decided by July 14 and shares are due to start trading on the JSE under the symbol “HSP” by July 18.
UBS is the bookrunner for the offering. (Reporting by David Dolan; Editing by Hans-Juergen Peters) ($1=6.869 Rand) (For more Africa cover visit: af.reuters.com — To comment on this story email: SouthAfrica.Newsroom@reuters.com)