Ethos Private Equity leads South Africa logistics deal
South Africa’s Ethos Private Equity has teamed up with the country’s $150bn Public Investment Corporation, one of the continent biggest asset managers, and Development Partners International to acquire a majority stake in logistics company RTT Group.
With the investment in Johannesburg-based RTT, Africa’s largest privately-owned parcel distribution company, the consortium is backing a business poised to benefit from the growth of e-commerce as more people join the middle class. RTT, which has annual revenues of R2.5bn ($235m) and employs nearly 5,000 people, delivers on behalf of large fashion retailers, as well as companies in the telecoms and pharmaceutical sectors.
Ethos said the consortium acquired a stake of around 80 per cent in RTT from shareholders Actis, Rand Merchant Bank and Old Mutual, who wanted to exit their investment. The terms of the deal were not disclosed due to a confidentiality agreement.
One of RTT’s top priorities will be expanding its footprint in Africa, including neighbouring countries such as Namibia, Botswana and Mozambique, Ethos partner Anthonie de Beer told beyondbrics. The company will then look at east African markets such as Kenya, Uganda and Tanzania.
The investment ties into Ethos’ strategy of using South African companies as a platform to expand into the rest of sub-Saharan Africa, said de Beer. The region is forecast by the IMF to grow at 5.4 per cent this year, from 4.9 per cent in 2013. Growth in Tanzania and Mozambique is expected to be more than triple the 2.3 per cent projected for South Africa, though the continent’s second biggest economy still accounts for over half of its private equity activity.
“You find in South Africa a number of large companies, fairly dominant in their niche markets and run by extremely good management teams (which) all have the ability and capacity to expand incrementally,” de Beer said.
“These companies need a bit of a pushing to expand their horizons into Africa...We are actively driving expansion strategies with a number of our current portfolio companies, and assess all new investment opportunities through an ”˜Africa lens’.”
click here to be redirected to the FT website to read the article in full.