Consortium Buys Waco International
Ethos partners up with RMB Ventures and Standard Bank to tap into growing merger appetite in sub-Saharan Africa.
A CONSORTIUM led by private equity group Ethos has bought global industrial services company Waco International for an undisclosed amount in a deal signalling the continued strong appetite for mergers and acquisitions in sub-Saharan Africa.
Ethos partnered with RMB Ventures and Standard Bank in the deal, its 102nd since it was founded in 1984.
Ethos, which has an office in Johannesburg, and has investments in companies operating in sub-Saharan Africa, is also in the process of raising $750m to fund further acquisitions.
Standard Bank, which is Africa’s largest bank by assets and core tier 1 capital, arranged the funding for the deal. Black-owned Kagiso Strategic Investments was also a partner. Kagiso already owns 25% of Waco Africa.
Waco International provides forming, shoring and scaffolding services, as well as relocatable modular buildings, and sanitation solutions. It is made up of Waco Africa ”” which has four units under it ”” Waco UK, Waco Kwikform Australia and Form-Scaff Chile. Waco group CEO Stephen Goodburn said the change of ownership would bring several benefits, such as introducing a strong shareholder base sharing Waco’s growth strategy.
Nick Hudson, a senior transactor at RMB Ventures said Waco was an attractive and long-term investment opportunity.
"We are excited about the possibility of superior growth for the next five years," said Stuart MacKenzie, a partner at Ethos yesterday. "It is a business we know very well as we were previously invested in it and has the opportunity to (further expand)," he said.
Ethos has been on the acquisition trail in recent months. Its recent deals included the acquisition of South African corporate promotions company Kevro for R850m, and Universal Industries and its exit from sports goods company Holdsport through an initial public offering.
Mr MacKenzie was bullish about the group’s business prospects, brushing aside competition in the private equity space coming from such global heavyweights as BlackRock and Carlyle from the US and the UK’s 3i.
"We have a very strong competitive landscape and (that) is always something that we are respectful of. We have a great track record and we continue to build our franchise. It is always healthy to have competition and we don’t rest on our laurels," said Mr MacKenzie.
"We think there are great opportunities for companies in our portfolio and all of them have an Africa strategy in various degrees of development although getting it right is not necessarily a simple thing," he said.
"But we think the continent offers South African companies great opportunities and we look at where growth is coming from in the next 10-15 years and we spend time researching and thinking to try and identify (prospects for investment)," said Mr MacKenzie.