In one of the largest private equity and black economic empowerment (BEE) deals of the year, a consortium of private equity investors has announced the acquisition of all the businesses and shares of Ozz Limited (Ozz), one of South Africa’s largest engineering manufacturing companies, for a consideration of about R500-million.
Members of the investor consortium and their respective shareholdings are: RMB Corvest (37,5%), Ethos Private Equity (37,5%) and prominent black empowerment group, Kagiso (KGM), through its private equity fund, Kagiso Ventures (25%).
The deal marks the entry of Kagiso into the engineering sector, being an important and until now, neglected industry from an empowerment perspective. Its importance stems, in part, from the large opportunities for job creation.
All conditions precedent and the required regulatory approvals have been met. Shares in Ozz Limited were suspended on the JSE Securities Exchange on 29 April 2003, and the company was delisted on Thursday.
Ozz, now a substantial black empowerment entity, is an industrial holding company and parent company of an engineering based group. Incorporated in South Africa in 1946 and listed on the JSE Securities Exchange since 1984, it manufactures an extensive range of parts used in the processing of mineral ores and aggregate for road making, construction and infrastructure — supplied locally and offshore.
The mining industry, (specifically the gold and platinum industries) is a strategic user of Ozz’s highly specialised cast metal equipment. The company is in a prominent marketing position and services a wide geographic market from its South African facilities, including Europe, Australia and the Americas.
Kagiso’s Roger Jardine, newly appointed non-executive chairman of Ozz and a physicist by training, says: “We intend to create a transformed empowerment company, which is a leading supplier to the mining and related industries. Government has particularly emphasised broad-based empowerment ventures to be representative of the new South Africa and we believe that the Ozz investment is a meaningful step in this direction.
As far as the Ozz management team is concerned, the major management shareholder, Gary Zulberg will phase out his involvement in the company in the short term, but will continue to consult to Ozz to ensure skills transfer. The current management is suitably able and incentivised to manage the company to its fullest potential.
Ozz’s growth strategy is based on the planned expansion in the mining and infrastructure industries both locally and globally, and the Mining Charter’s empowerment procurement policy should favour Ozz over its multinational competitors in Southern Africa. – I-Net Bridge