Absa Corporate and Merchant Bank (ACMB) has bought a 20% stake in a black-owned financial services company, Vunani Corporate Holdings, the banking group said on Monday.
”We see in Vunani, to a certain extent, what Barclays sees in Absa — a significant upside in the future,” said Robert Emslie, ACMB’s managing executive.
The two companies have worked together since 2003.
Vunani advised on the listing of Telkom, the restructuring of the Airports Company South Africa, and Denel, and has introduced black economic empowerment partners to Eskom, PetroSA and AP Moller Maersk.
Vunani was born out of the management buy-out of African Harvest Capital in 2004 and is 80% black-owned.
”We have done business with them already … and they have an excellent team, an excellent network and an excellent deal flow, while Absa can supply the balance sheet,” Emslie said.
He told reporters in Johannesburg the deal also makes sense from an investment banking perspective.
”From a private equity perspective, this makes investment banking sense … we are going to make money out of the investment,” Emslie said.
Ethan Dube, chief executive of Vunani, said although the company has the skills, the track record and the empowerment credentials, it does not have the financial resources to do the type of deals it wants to do.
”The key thing is the balance sheet, which we don’t have. This will allow us to fund deals using Absa’s balance sheet,” he said.
Neither party would disclose what the 20% stake is costing ACMB. — Sapa