Ethos Beats Other Players To Buy Moresport
Sports goods group Moresport has found a new home, after the competition authorities prohibited retail and wholesale group Massmart from buying the company earlier this year.
Private equity player Ethos said yesterday it had bought Moresport, together with the group’s management, for R681m, topping the R403m Massmart was willing to pay for 84,1% of the group. Other groups, including discount retailer Mr Price, were also rumoured to have been in the running for Moresport.
Moresport CE Kevin Hodgson said Massmart’s purchase price had been determined using Moresport’s earnings for the year to February last year, while the Ethos deal came 18 months later.
“We are paying a full price but we feel there is a lot of value in the business we are buying,” Ethos partner Shaun Zagnoev said.
Moresport operates nationally through the Sportsman Warehouse, Outdoor Warehouse and Sportshoe World chains. It was bought from Vestacor, Nedcor Investments and management. Vestacor was part of the consortium that bought department store Stuttafords in June.
Ethos said it would fund the purchase from its Ethos Fund V, which had raised a significant pool of capital. The Moresport deal was the third to be funded from Fund V, following its purchases of payments solution group Kanderland and plumbing supplier Plumblink.
“We believe Moresport is a valuable asset, given its strong market position, visionary management and track record of profitability,” Zagnoev said. Ethos partner Ngalaah Chuphi said it would continue to drive Moresport’s expansion through further acquisitions and growth. “The company is financially strong with determined management, which will allow us to take advantage of the upswing in retail growth, low interest rates, low inflation and a strong currency,” Chuphi said.