A proposed acquisition by the Capricorn Group Limited to enter the lucrative South African market has been described as the next step in the evolution of the southern African financial services group headquartered in Namibia and listed on the Namibia Securities Exchange.
This follows Capricorn's announcement yesterday that it made a successful binding offer to acquire a majority interest in Centrafin (Pty) Ltd, a South African specialist equipment rental and asset financing business, from Fonzosys (Pty) Ltd, part of the Alviva Group of companies.
"South Africa is an important market in our growth ambitions, and Centrafin presents us with the opportunity to enter this market through an established operating financial services business. It will also introduce specialist asset finance and non-bank lending capabilities to the sectors in which we participate, further diversifying the interests of our Group," said David Nuyoma, Group Chief Executive Officer of Capricorn Group.
The proposed transaction is a significant milestone in Capricorn Group's growth and diversification strategy because it supports the Group's ambition to broaden its revenue base beyond its established markets in Namibia and Botswana through strategic and material investments in South Africa.
"This is an exciting and significant moment in the growth journey of Capricorn Group. Our ambition is to continue building a stronger, more diversified and increasingly regional financial services Group, and the proposed acquisition of Centrafin represents a deliberate and meaningful step forward in that journey," said Nuyoma.
A Capricorn statement notes that the parties have agreed to an enterprise value of N$788.3 million for Centrafin, subject to the finalisation of the audited financial results. Under the proposed transaction structure, and given its goals of working with Fonzosys to increase its regional financial services presence, Capricorn Group will initially acquire 81.6%, with the option to acquire a 100% stake in Centrafin over a five-year period.
The signing follows Capricorn Group's due diligence across Centrafin's financial, risk, legal, tax, operational, brand, reputation, human capital, and regulatory areas. Centrafin brings an established position in South Africa's specialist equipment rental and asset financing market.
The strategic rationale is to combine Centrafin's strengths with Capricorn Group's broader capabilities, resources and financial services experience.
Nuyoma added: "We are particularly excited about Centrafin because we see a strong business with a respected brand, experienced and skilled people, entrepreneurial culture and valuable customer relationships. These are strengths we respect and want to preserve and build on. For us, successful growth is about more than entering new markets. It is about investing in strong businesses where we believe we can add value, while remaining true to our purpose of being Connectors of Positive Change. We see significant potential in bringing together the respective strengths of Capricorn Group and Centrafin to create sustainable, long-term value."
As part of the Capricorn Group, the Centrafin brand is expected to remain unchanged.
Jenny Gill, Managing Director of Centrafin, welcomed the proposed transaction, highlighting the strategic alignment between the two organisations: "While this represents an exciting growth opportunity for the Capricorn Group, it is equally significant for Centrafin as we embark on the next phase of our journey. Over the years, Centrafin has successfully evolved from a technology equipment rental business into a diversified asset finance house with a N$3 billion book spanning a broad range of asset classes. With the support of our shareholder, we have taken considerable time and care in identifying the right long-term partner.
Our objective was never simply to conclude a transaction, but to find an organisation that shares our values, recognises the strength of our people and brand, and can help accelerate our vision of building a leading, multi-faceted finance business. Throughout this journey, our commitment to being Rapid, Reliable and Responsive remains unchanged".
Gill added that successful businesses are "built by talented people united behind a common purpose. We believe Capricorn Group is the right partner to support the continued development of Centrafin, our employees, our customers and our broader stakeholder community".
Meanwhile, the acceptance of the binding offer does not constitute the completion of the proposed transaction. Capricorn stated that implementation remains subject to negotiating and executing definitive transaction agreements, approvals from the Bank of Namibia, the South African Competition Commission, and compliance with applicable Namibia Securities Exchange requirements.
"There are also certain conditions precedent which must be fulfilled or waived by 31 January 2027, or such later date as the parties may agree in writing", Capricorn added.
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