Ethos Gets Green Light In R1bn Tiger Auto Acquisition
Ethos Private Equity today secured overwhelming shareholder approval to acquire and delist Tiger Automotive Ltd. (TiAuto) from the Johannesburg Securities Exchange. The offer of R17.51 per share represents an estimated enterprise value of R1.05bn and a 33% premium relative to the 30 day VWAP pre-cautionary price of R13.15 as at 17th October 2007. When concluded the transaction will be the first publicly announced private equity transaction over R1bn in 2008.
Commenting on the offer rationale, Ethos partner, Shaun Zagnoev said, “TiAuto represents leading brands, with a unique business model of prime locations, superior service and a comprehensive stock range. Ethos grows the businesses we buy and we feel confident that our partnership with TiAuto’s experienced management team will enable the business to expand their retail footprint.”
TiAuto was created in 2006 following the unbundling from Tiger Wheels. The company’s principal operations include the wholesale (Yokahama Southern Africa) and retail trading (Tiger Wheel & Tyre) of vehicle tyres and aftermarket alloy wheels in the Southern African and UK markets, with the lion’s share of sales emanating from South Africa. Tiger Wheel & Tyre is the only independent tyre and wheel retailer of its size in South Africa. TiAuto represents some of the leading local and international tyre and alloy wheel brands and employs over 1,100 people.
TiAuto Group MD Keith Rivers recollects, “Ethos approached TiAuto in August 2007. The management team was impressed with their growth philosophy, which will enable TiAuto to focus on building the business rather than the distractions experienced over the past 18 months. We were impressed by the speed at which Ethos was able to process the transaction and hope that their previous experience in this market sector will support our strategic planning into the future.”
Ethos Private Equity owned Dunlop Africa for eight years, exiting the business in 2006 to India’s largest tyre manufacturer, Apollo Tyres Ltd.
Ethos has participated in many landmark transactions, which have made a lasting contribution to economic growth in South Africa. Since the launch of Ethos Fund V in October 2006, the group has closed investments in market leading companies: Transaction Capital (formerly known as Kanderlane), Plumblink, Moresport (Sportsmans Warehouse and Outdoor Warehouse), Alexander Forbes, Brandcorp and Nigerian-based Oceanic Bank International plc. Other publicly announced transactions which Ethos is currently pursuing include Gold Reef Resorts and House of Busby.
The offer to the TiAuto shareholders is still subject to certain conditions precedent, including Competitions Commission approval.