Ethos Receives Overwhelming Shareholder Support To Acquire Leading Retail House - Busby
Ethos Private Equity today received overwhelming minority shareholder approval to acquire JSE-listed, The House of Busby, in partnership with management and black empowerment private equity firm, Sphere. The R21.00 per share offer to minorities represents an estimated enterprise value of R1.3 billion.
This is the second transaction announced by Ethos in the past few weeks, following shareholder approval of the R1.03bn buyout of Tiger Automotive.
The House of Busby is both wholesaler and retailer of branded and unbranded apparel, handbags, accessories, leather goods and related products with operations in both South Africa and Australia. They have the sole trading rights to many leading local and international brands, including Aldo, Nine West, Guess, Mango, Marion and Lindie, ESPRIT, Busby, Delsey, Hepker’s, Kipling and Travelite.
Ethos Partner, Danie Jordaan comments, “Ethos has a long history of investing in leading companies with leading brands. We identified the growth potential of Busby in early 2007, based on their exclusive distribution rights of world leading and highly desirable brands. Coupled with a solid management team with unique and proven experience, particularly in branded retail, product design and sourcing from China, we envisage a winning long-term partnership.”
“We strongly believe that our relationship with Ethos will enable Busby to reach the next level in market presence in both south Africa and Australia,” adds Busby CEO, Keith Brouze. “Ethos gives Busby access to a substantial pool of capital which will support our planned growth trajectory and their commercial expertise will add considerable value to the business. I believe that we can grow faster and build a more robust business through this partnership”.
“We have structured this transaction with a specific view to grow the business. Interestingly, this means that the gearing is relatively low for a private equity type transaction. It is our firm belief that this structure, together with entrepreneurial management, will enable Busby to expand their brand market penetration and possibly allows the addition of other aspirational brands to the portfolio” concludes Ethos Associate, Michael Jensen.
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. Sphere Private Equity invests directly in South African companies in the industrial and financial services sectors. Recent transactions include: Savcio Holdings, Dynamic Fiber Mouldings and Barone, Budge & Dominick.
The Ethos Private Equity offer to the Busby minority shareholders is still subject to certain conditions precedent, including Competition Commission approval.