Ethos Buys Moresport For R681m
Johannesburg - Ethos Private Equity and Moresport management has bought the sports goods and outdoor activities firm for an enterprise value of R681m.
Announcing the transaction on Monday, Ethos Partner Shaun Zagnoev said there is a growth opportunity for Ethos' newly raised Fund V. Ethos has managed and fully invested four buyout funds, partially invested a Technology fund, and has raised a significant pool of capital for its current buyout Fund, Ethos Fund V. The Moresport transaction is the third concluded deal in Ethos Fund V.
"We believe Moresport is a valuable asset, given the company's strong market position, visionary management and solid track record of profitability. The positive growth indicators in the South African economy in general and the retail and sporting sub-sectors in particular are additional attractive factors," Zagnoev added.
Moresport is a specialist sports goods retailer, trading countrywide through store chains - Sportsmans Warehouse, Outdoor Warehouse and Sportshoe World. The company was previously controlled by Vestacor, Nedcor Investments Limited and management.
Moresport CE Kevin Hodgson said a number of potential buyers had expressed serious interest in Moresport. "We have grown a formidable South African footprint built on the expertise of our management team, who have effectively implemented a unique and successful sporting and outdoor equipment retail offering - all factors which I believe have made Moresport an attractive investment opportunity for Ethos." He added there was a growing trend towards health and fitness in South Africa which is set to continue, and offers enormous potential for the business. There was also no doubt that the awarding of the 2010 Soccer World Cup to South Africa would create an additional awareness for branded quality sporting merchandise, he added.
The income levels of many South Africans are rising which has translated into a demand for consumer goods, not the least of which involve outdoor activities and products. He said this was expected to grow strongly, driven in part by the strong drive by the South African government towards domestic tourism. He added that a further two Sportmans Warehouse stores would be opened this quarter.
"Ethos will partner Moresport's management to unlock and create value. Together we will drive expansion plans through further acquisition and growth. "The company is financially strong with determined management which will allow us to take advantage of the upswing in retail growth, low interest rates, low inflation and a strong currency," said Ethos Partner Ngalaah Chuphi.