CA approves RMB, Investec deal
Staff Writer | Tuesday August 15, 2017 16:23
The 10 companies, housed under the name Kamoso Distribution were two years ago sold by Choppies directors, Ramachandran Ottapathu and Farouk Ismail to a consortium led by Standard Chartered Private Equity (PE) in a deal worth P452 million. In a statement released yesterday, the CA said the deal will not likely reduce competition in the industry, but can only go ahead if it’s not going to result in job losses.
“The Authority determined through the analysis of the facts of the merger, that the proposed transaction is not likely to result in the prevention or substantial lessening of competition.
“The market structure in the relevant markets will not be altered, and as such this transaction does not raise any competition concerns. The proposed acquisition is approved with the undertaking that there shall be no retrenchments as a result of the proposed transaction,” read the statement. Under the terms of the new deal, StanChart PE, which bought a 12.8% stake in Choppies in 2013 in a deal estimated to be worth $60 million, together with Development Capital Partners (DCP) are selling 72% in Kamoso Distribution.
RMB, which is the investment-banking arm of South Africa’s FirstRand, is pursuing the deal through its private equity unit called RMB Ventures Seven, while Investec Asset Management is going through its Mauritius-domiciled private equity subsidiary, Investec Africa Fund.
The target enterprises under Kamoso Distribution include Keriotic Investments, which distributes groceries to Choppies, ILO Industries Grain (grain packaging), Honey Guide (milling company), Mediland Healthcare (pharmaceuticals distribution), Mont Catering (air conditioning supplies), Real Plastics (bottled water), Builders Mart (building supplies) and Liquorama (liquor outlets).
According to the CA, the directors of Kamoso are V. Sanooj (Indian); B. Stewart; G. McLaughlin (both Americans), and Rizwan Desai (Motswana).
Peter Baird, the former head of the Standard Chartered PE Africa is one of the directors of IRK, a company controlled by Investec Africa Private Equity Fund and RMB Ventures Seven.
Kamoso Distribution managing director, Derrick Soanes said he was unable to comment on the deal until all regulatory obligations have been satisfied. Choppies directors, Ottapathu and Ismail pocketed P452 million when they sold the companies to StanChart PE and DCP two years ago.
At that time, Ottapathu told Mmegi BusinessWeek that the selldown was in line with good corporate governance and international best practice. Efforts to get a comment from StanChart PE on why they were selling were fruitless at the time of going to press.
However, the Wall Street Journal reported in September 2016 that London based Standard Chartered PLC was looking to close its private equity unit over the next two years.
StanChart PE, which is a wholly- owned subsidiary of London listed Standard Chartered bank, manages about $5 billion, including the bank’s own funds and money from external investors such as the Goldman Sachs Group. The unit owns stakes in about 80 companies across Asia, Africa and the Middle East.
StanChart PE Fund has invested about $800 million in Africa.