Waco International Sold To Ethos-led Consortium
Shareholders of Waco International Limited (“Waco”) today announced the sale of Waco to a consortium led by Ethos Private Equity, for an undisclosed sum. Other key shareholders in the consortium are management, RMB Ventures, and Standard Bank. Kagiso Strategic Investments retain their 25% shareholding in Waco Africa.
Waco is a leading industrial services business in South Africa, Australasia and the UK, providing forming, shoring and scaffolding services, as well as relocatable modular buildings, and sanitation solutions. Waco has been private equity-owned since 2000. This latest transaction follows the successful sale in 2011 of the group’s Australasian relocatable modular building business, Ausco Modular.
Stephen Goodburn, Waco Group CEO said:
“I am very excited about this transaction. The change of ownership brings a number of benefits to the group, including strong shareholders who are willing to support our growth agenda, improved Black Economic Empowerment credentials, a robust capital structure, a refreshed commitment to the business by key executive management, and a return to South Africa for our holding company.”
Stuart Mackenzie, partner at Ethos Private Equity said:
“Ethos is excited to be investing in this market leading group. Waco's businesses have been built up over many years and have strong brands that are founded on a reputation for excellent customer service. The group is managed by a seasoned management team and we are looking forward to partnering them in growing the business to an even more substantial industrial services group.”
Nick Hudson, a senior transactor at RMB Ventures said:
“With its leading market positions and strong cash generation ability, we consider Waco a very attractive, long-term investment opportunity. The group’s large asset base gives it tremendous scalability when economic conditions improve.”
The Waco group comprises: Waco Africa (with four divisions: Form-Scaff, SGB-Cape, Sanitech, and Abacus Space Solutions); Waco UK; Waco Kwikform (Australia), and; Form-Scaff Chile. These businesses have been providing essential services in their markets in excess of 60 years in some instances, and form an integral part of maintenance and infrastructure roll-out expenditure programmes, including: dams, bridges, power stations, petrochemical plants, mines, schools, hospitals, sanitation plants, shopping centres and office blocks.
Waco earns its revenues primarily through its rental businesses. The hiring of equipment provides a more predictable stream of income and cash flow than Waco typically generates from its sales businesses. Over the last few years, the group has successfully forged inroads into sub-Saharan Africa and sustaining this growth momentum is a key management focus.
Goodburn emphasised that:
“Our private equity partners have positioned Waco’s balance sheet to ensure that we are able to fund continued growth. Over and above organic growth, Waco now has the ability to finance key targeted acquisitions. Besides this, as always, our focus will be on providing excellent service to all of our customers, ensuring that the work gets completed to the best possible standard and with the highest regards to safety standards.”
Standard Bank advised the acquiring consortium and arranged the acquisition funding required for the transaction.
Brian Marshall, Head: Leverage Finance, Corporate and Investment Banking commented:
“Standard Bank continues to partner and support the Waco team in the next phase of their journey and we are excited to see the introduction of Ethos and RMB Ventures to the group. Our advisory, structuring and financing teams developed and delivered the optimal solutions which provide the consortium with a solid platform from which to realise their growth ambitions.”