Globally the importance of safety compliance in several high-risk industries is no longer in question. Numerous accident and incident investigations identify the lack of compliance with regulations, rules, and governing procedures as a central contributing factor to accidents and fatalities. Most recently in South Africa the Lily Mine disaster and Grayston Bridge collapse are high profile examples of the inherent safety risk in these two industries. And the drive towards zero-harm is part of the reason that Ethos announced a R1,6bn investment into the Eazi Group, Africa’s market leader in the rental, sale and servicing of work-at-height and material handling solutions, including access platforms, telehandlers and accessories.
Ethos Fund VI acquired 65% of the business, with an investment vehicle controlled by Jonathan Beare (Buffet Investments) and founding shareholders owning the remainder.
Founded in 2003, The Eazi Group – comprising Eazi Access Rentals, Eazi Sales & Services, Eazi Africa and other subsidiaries – boasts the largest and most diverse fleet of boom lifts, scissor lifts, telehandlers and vertical personnel lifts on the African continent. The Group services customers across various sectors of economy in the construction, shipping, manufacturing, FMCG, transport, entertainment and mining industries by offering work-at-height and material handling solutions, including application solutions, machine training, on site project management and support. The Eazi Group has exclusive distribution rights for leading brands in South Africa, including JLG, owned by NYSE-listed Oshkosh Corporation, considered one of the world’s leading mobile high access equipment manufacturers; Magni telescopic handler; and Maeda mini cranes.
“Ensuring safety is not always a given in high-risk industries. In South Africa, it is evident that there is a lack of compliance with legislated safety regulations. Safeguarding and protecting employees in the workplace is non-negotiable – no matter what the costs or challenges are,” says Jean du Randt, General Manager: Group Service of the Eazi Group.
In the 2014 Health and Safety statistics report for South Africa’s mining sector, Minister Ngoako Ramatlhodi, who headed the Department of Minerals and Resources at the time, conveyed his condolences to the families of the 84 mine workers who lost their lives that year. While he commended the reduction in fatalities over the past two decades, the fact remains that mining is still one of the most dangerous occupations in the country, as recently seen in the accident at Lily Mine in Mpumalanga, which dominated the news in the first quarter of 2016.
Despite the dangers inherent in mining, the construction industry has surpassed the mining sector in recorded fatalities. According to the Federated Employer’s Mutual Assurance Company, construction-related fatalities average 150 per year, with an additional 400 accidents occurring on average annually.
Former Minister Ramatlhodi also stated that 35% of mining fatalities are related to working at height. This statistic is echoed in the construction sector and is compounded by a lack of fall protection gear and equipment, and undoubtedly a lack of knowledge of safety requirements.
The construction boom in South Africa is rapidly driving up the demand for work-at-height solutions, and also increases the need to conform to safety governing procedures, rules and regulations. Recent changes to economic conditions also drive a need for efficiency, culminating in deployment of improved ways of working at height.
“The trend of deploying more mobile elevated work platforms to perform work-at-height duties more efficiently calls for proper instructions to operate machinery while following safety and compliance regulations. These are the prerequisites for the reduction of fatalities in high risk industries,” says Du Randt.
Additionally, all driven machinery is regulated by the National Code of Good Practice and therefore has to comply with this legislation. NCOP 2015 associates mobile elevated work platforms with a C53 license. Du Randt elaborated, “This license is currently based on the MEWP unit standard and, albeit controversial in its construct, delivers a sound basis for operating a MEWP. We found that some training providers incorrectly associate one of the crane unit standards putting the operators and their employers at risk.”
The latest transaction is Ethos Fund VI’s fifth investment in 12 months, following recent investments into Eaton Towers – a leading pan-African telecom-towers company, Neopak – offers world-class paper-based packaging solutions across South Africa; Twinsaver – a leading South African manufacturer, marketer and distributor of branded tissue products; and, Autozone – the largest privately owned automotive parts retailer and wholesaler in Southern Africa.
Ethos also announced the realisation of Plumblink to JSE-listed Bidvest in md-2015, for which it scooped the coveted Catalyst Private Equity Deal of the Year Award for that year; plus the sale of its shareholding in JSE-listed Transaction Capital last December.
Commenting on the investment, Shaun Zagnoev, Ethos partner, said the Eazi Group is a prime example of South African pioneering spirit where visionary entrepreneurs identified a void in the market and through grit and determination established a new industry.
“In a little over a decade, management built a differentiated business, offering service excellence, enhanced safety and innovative cost-effective solutions to their customers. We are delighted to invest in the next phase of Eazi’s journey to reach full potential,” says Zagnoev.
Billion rand deals are rarely born and hatched overnight as Brett Fleming, CEO of the Eazi Group reiterates. “Ethos expressed interest in our business over many years, during which time we developed a trusted relationship. When the opportunity presented itself, Ethos – with its value-add capability and experience in partnering owner-managed businesses – was the ideal partner to cultivate our growth strategy.”
Ethos is harvesting the years it has spent developing these relationships and realised with the Eazi Group that, just sometimes, regulations can actually be good for business.
“Comments for the Independent Adjudication panel”:
Ethos Fund VI made a significant R1.6 billion Rand investment to acquire a 65% stake in the acess platforms, telehandler and accessories business. They will hold the investment alongside Buffett Investments (Jonathan Beare) and management, Eazi Group has managed to carve a very successful niche for itself since it commenced business in 2003. It’s a large investment by Ethos and a-typical in that they’ve acquired control of Eazi Group.