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Madima

@MaanoMadima

24 Nov

Northam Holdings is now the majority shareholder of Royal Bafokeng Platinum after acquiring 32.8% for R17bn.

Northam will settle R17bn by issue of ~34.4m Northam shares to RBH which is ~8.7% of Northam and R8.6bn in cash.

R3.6bn of the R8.6bn cash will be paid upfront.

A sale of shares agreement was entered into between Northam, Royal Bafokeng Holdings and Royal Bafokeng Investment Holding in terms of which Northam may acquire up to 33.3% of all the Royal Bafokeng Platinum ordinary shares in issue.

Northam bought 93 930 378 (32.8%) RBPlat shares from RBIH, for an aggregate purchase consideration of R17billion representing R180.50 per RBPlat share.

The R17bn was settled through a combination of the issue of ordinary shares of Northam Holdings and cash.

Read 20 tweets

Madima

@MaanoMadima

24 Nov

Bain Capital, famous for the Edcon LBO in SA, is back with one of the biggest LBO of 2021.

Athenahealth has entered into a definitive agreement to be jointly acquired by Bain Capital and Hellman & Friedman for $17billion from Veritas Capital and Evergreen Coast Capital.

Veritas Capital and Evergreen Coast Capital took Athenahealth private for $5.7bn in 2019 and merged it with assets from GE Healthcare.

Typical leveraged buyout transaction.

Veritas and Evergreen Coast Capital received $4.9bn in debt financing and only out in $800m of equity.

Of the $17bn required for the Antheahealth deal, only $7bn will be financed with equity from Hellman & Friedman and Bain Capital with Hellman & Friedman gettkbg the lion's share.

$10bn will be raised from debt markets.

Debt is generally the cheaper cost of capital.

Read 17 tweets

Madima

@MaanoMadima

22 Nov

Dis-chem is having a busy financial year that includes;
4 acquisitions,
launch of a delivery service and
the sale of Dis-chem shares by the founders (7.50% via an accelerated bookbuild, 3.75% to management and 10.05% to a BEE consortium).

1) Sep 2021, Competition Tribunal approved Dis-Chem’s acquisition of 100% of the issued share capital in and shareholder claims of Pure Pharmacy, trading as Medicare Health (50 pharmacies) from existing shareholders.

Dis-Chem will pay a final purchase consideration of R250m.

Many of the stores in the Medicare portfolio are in convenience centres, in geographies where Dis-Chem is currently under-represented which gives the Group access to new markets.

Year ended 28 Feb 2021, Medicare generated revenue of R1.1 billion, with dispensary contributing 67%

Read 13 tweets

Madima

@MaanoMadima

21 Nov

If it is true that ARC (Motsepe) and Remgro (Rupert) might buy Puma rugby union, how will it work considering that they already own 74.9% of the Blue Bulls?

Bulls signed an equity deal which led to a change in the shareholding to;
ARC: 37.45%,
Remgro: 37.45%
Bulls: 25.1%.

In 2003, Patrice Motsepe bought a 51% controlling stake in Sundowns to partner the Tsichlas family.

He ⬆️ his shareholding in Sundowns in 2004 by buying the remaining 49% from the Tsichlas family for an +-R65m which led to the renaming of the club to ‘Mamelodi’ Sundowns.

Remgro owns 100% of the Stellenbosch Academy of Sport (SAS).

SAS is the sole owner of Stellenbosch FC which plays in the DSTV league.

SAS is also a permanent base for the Western Province Rugby.

Both Patrice Mostepe and Johann Rupert own two PSL teams and a rugby team.

Read 4 tweets

Madima

@MaanoMadima

21 Nov

How did Ed Woodward ended up at Manchester United?

In 2005, the Glazers took control of Man Utd through a ~£790m Leveraged Buyout (LBO).

Due to the complexity of the LBO, Woodward who worked as an M&A specialist at J.P. Morgan was assigned by the bank to assist in the deal.

Leveraged Buyouts (LBOs) are transaction where a company is acquired using debt as the main source of consideration.

The debt is usually secured against the assets and cashflows of the acquired company.

Manchester United was debt-free before the Glazers bought it.

The battle for the control of RJR Nabisco showed that companies that are mature, stable, predictable are good candidates for a LBOs.

Due to the amount of debt that will be loaded onto the acquired, predictable cash flows are important to make the debt repayments.

Read 4 tweets

Madima

@MaanoMadima

20 Nov

Mondelez International (owns Oreo, Cadbury) will soon close a deal that will see it buy all or part of AVI (owns Spitz, Bakers, Five Roses).

International barbarians are at the gates SA listed companies.

Recent acquisitions include;
Afrox
Imperial
Clover
Pioneer Foods
SABMiller

The acquisition of AVI could lead to its delisting from the JSE.

JSE is bleeding companies.

In 1999, JSE had 811 companies listed on the main board.

It now has less than ~325 listings.

15 companies delisted from the main board in H1 2021 with 10 more coming in H2.

Neil Froneman, CEO of Sibanye-Stillwater caused a stir when he suggested that Sibanye, Gold Fields and AngloGold Ashanti should consolidate and create a world champion gold business or risk being bought by foreign entities because of their relatively low valuations.

Read 22 tweets

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