Ethos Private Equity launched today the sale of its last shares in Transaction Capital, the Johannesburg-listed commercial finance company, as an accelerated bookbuild.
Rand Merchant Bank is leading the sale of the 7.7% stake, which came after Transaction’s shares hit an all time high today of R11.90. The stock closed at R11.20.
The sale of 43.8m shares would fetch R490m ($34m) before any discount.
Ethos has been invested in Transaction since 2006. The business floated in 2012 for R738m at R8 a share. It now has a market cap of R6.4bn ($440m).
The company has two business divisions: asset-backed lending, which finances the purchase of some 25,000 taxis, and transaction capital risk services, which manages the non-performing loans of 5.7m borrowers ”” about one in six South African adults.
The company has performed strongly, with headline earnings up 19% in the financial year to September 2015, to R393m. Return on average assets rose from 3.5% to 4.4%.