Rationale for the transaction
3. The deal is considered – by Corvest 6 – as a viable opportunity to acquire an equity stake in a profitable company.
The management consortium wishes to buy the target business because it would enable them to obtain a share of the company in which
they currently work.
The merging parties
4. The primary acquiring firm is Newco, a dormant shelf company created solely for this acquisition. Post-merger, it will be controlled by Corvest 6 and the consortium.
5. The primary target firm is SA Leisure, a division of First Lifestyle (Pty) Ltd (“First
Lifestyle”). Other target firms are Leisure Compounders (Pty) Ltd (“Leisure Compounders”), Isithebe Plastic Corporation
(Pty) Ltd (“IPC”), and Jafprop (Pty) Ltd (“Jafprop”). SA Leisure controls the latter 3 business entities. Ethos Private Equity Fund IV holds 45% of the shares in First Lifestyle that
is part of Ethos Private Equity Ltd, which in turn is 100% controlled by Ethos Holdings Ltd (“Ethos Holdings”). Individuals
hold the rest of the shares in First Lifestyle with no single shareholder holding in excess of 15% of the shares. Ethos Holdings is controlled as to 50.01% and 49.99% by its executive management members and RMB Private Equity (Pty) Ltd (“RMB
Private Equity”) respectively. RMB Private Equity is controlled as to 85% by FirstRand Bank Holdings Ltd (“FirstRand
Holdings”).
What is it that the merging parties do?
6. Newco is a newly formed company, and has not traded before. Corvest 6, a subsidiary of FirstRand, provides finance and assistance to potential investors to enable them to acquire a company that they currently
manage or that that which they have a substantial stake in. FirstRand is the holding company of the FirstRand Group of companies which comprise diverse financial services activities in the areas of retail,
corporate, investment and merchant banking, life insurance, employee benefits, health insurance and asset and property management.
These services are provided to both local and international markets.
7. The target group is mainly involved in manufacturing, distribution, sales and marketing of plastic injection moulded products and related property
holding. They manufacture the following products:
θ
Outdoor Furniture – includes a vast array of tables and chairs;
θ
Housewares and storage – such as dish drainers, linen bins, laundry baskets, vegetable racks, food storage products and dustbins.
θ
Home Office – including the “buddi” branded range of plastic filing cabinets, drawers and desk units;
θ
Camping – that is, the “lifestyle” branded cooler boxes;
θ
Gardening – including hosepipes and spray attachments;
θ
Storage – such as “store it” branded storage boxes, shelving and the “kids stuff” branded storage products
for kids;
θ
DIY and Fishmaster – which are: the “big Jim” branded toolboxes, organisers, storage bins and various “Fishmaster”
branded tackle boxes.
Competition Evaluation
8. We are advised that there are no overlaps with respect to the activities of the acquiring firms that control Newco and that of
the target firm. There are no significant public interest concerns and we therefore agree with the Commission’s recommendation that the transaction be unconditionally approved.
___________ 26 April 2005
David Lewis
Date
Concurring: Norman Manoim and Yasmin Carrim
For the merging parties:
Chris Charter (Cliffe Dekker Inc)
For the Commission:
Hardin Ratshisusu (Mergers & Acquisitions)
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