By THE AFRICA BAZAAR Staff Writer
Actis said it sold a large part of its stake in South Africa’s financial services company Alexander Forbes Group Holdings Ltd through a JSE float on Thursday.
This followed Alexander Forbes’s successful return listing to JSE on Thursday.
Alexander Forbes’s 1.3 billion shares were oversubscribed and surged to R8.41 by the end of the day after debuting at R8.10, surpassing its initial price offer of R7.50.
The emerging-markets-focused private-equity firm said it off loaded a 9 percent stake, part of its 13 percent total stake in Alexander Forbes, marking a substantial exit from the company in which it helped lead a $1.2 billion buyout in 2007.
Actis Partner Natalie Kolbe said the company is proud of the progress it has made in transforming the business into a successful venture and is excited to see Alexander Forbes embark on the next stage of its development. She added that strong interest the company and other shareholders received prior to Alexander Forbes’s IPO and the successful debut of its listing on JSE “signals significant appetite from both African and international institutional investors.”
At the time of the listing, Mercer Africa Ltd, a subsidiary of New York-based Marsh & McLennans Cos. global insurance broker and risk management firm, acquired a 14.9 percent stake in Alexander Forbes and as previously announced as part of the exit deal the company will acquire an additional 19.1 percent following regulatory approvals for a total 34 percent stake, leading to a full exit for Actis and other private-equity consortium members who collectively hold a 54 percent stake of the Alexander Forbes pre-listing.
The deal gives Mercer an opportunity to broaden its business exposure in sub-Saharan African markets.
After Actis and fellow shareholders bought the company in 2007, they brought in a new management team that helped transformed the company and the board helped to recover reputational issues that plagued the business, attract industry experts to the board, develop a retail offering and expand EBITDA margins through disposing of non-core business units and driving cost efficiencies, said Kolbe.
Alexander Forbes’s (AFH) return to the exchange makes it the 11th company to list this year on JSE, bringing the total number of companies listed in the financial services sector to 28.
The company was previously listed on JSE in 1996 but delisted in 2007 as part of a $1.2bn leveraged buyout by private-equity investors Actis LLP and other shareholders.
Speaking after the listing, Alexander Forbes Chief Executive Officer Edward Kieswetter said the company’s return to the JSE provides it “with continuity to preserve the wonderful legacy and integrity of the Alexander Forbes brand, as well as the emotional and psychological equity.”
“Finally, listing gives impetus to our current strategic intent and growth plans,” said Kieswetter. He also said the company has decided to recognize its employees’ continued contribution to the company’s success by giving 1,000 free shares each to its permanent employees, which will vest after three years.
The company has about 1.3 billion shares, valued at about $1 billion, with assets under administration of R275 billion at the end of March.
“We are delighted to welcome Alexander Forbes back to the JSE where it lists in the financial services sector, one of the most vibrant on the JSE,” says Nicky Newton-King, CEO of the JSE.
Statistics South Africa (SSA) estimates that the financial services sector created 13 000 new jobs in the year through the end of March and currently employs over 1.8 million people and contributes almost 2 percent to the JSE’s total market capitalization.
