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Investment holding company Kagiso Tiso Holdings (KTH) has acquired a 51% shareholding in Servest Group, in a transaction that values the group at about R4.5-billion.
The deal would see Servest become the largest, majority black-owned, facilities management company in Africa, strongly positioning it to expand its footprint across the rest of the continent.
In the South African context, the group was expected to gain an advantage over other large facilities management companies, given its 51% black ownership level under the new revised black economic-empowerment codes.
As part of the transaction, KTH and Servest cofounder Kenton Fine would facilitate equity participation of management as part of a talent management and transformation plan.
“This transaction demonstrates clear delivery against KTH’s strategy of acquiring meaningful or majority stakes in fast-growing companies, which are supported by strong management teams and have good exposure to African market opportunities,” commented KTH CEO Vuyisa Nkonyeni.
“Servest is a unique investment that meets all our criteria. We were, therefore, able to execute this transaction on pure commercial terms without any external or vendor facilitation with an equity cheque of about R1-billion,” added KTH chief investment officer Jacob Hinson.
Beyond the commercial rationale, both parties saw the transaction as an important step in driving further transformation at Servest. It had embarked on an ambitious staff development drive and the establishment of a management trust reinforced the group’s commitment to transformation.
Servest CEO Kevin Derrick added, however, that the deal represented more than an empowerment transaction. “This not only clearly demonstrates our ongoing commitment to transformation and long-term sustainability, but brings with it significant opportunities for future growth, expansion and job creation.”
The acquisition remained subject to regulatory approvals, including approval by the South African competition authorities.
Servest has a significant presence in South Africa, Africa and the UK. It provides integrated facilities management solutions, including, besides others, cleaning, parking, catering and landscaping services, to more than 6 500 clients on 24 000 sites in South Africa.
Some of its most prominent clients are Transnet, Netcare Group, Anglo American Platinum, Debswana, Sasol, Sainsbury’s, the BBC and the UK House of Parliament.