Less than two months after the Property Charter came into effect, Asset Alliance — holding company of both South Africa’s largest auction and valuation companies, Auction Alliance and Valuation Alliance — on Thursday signed a black economic empowerment (BEE) deal at a company value of R100-million, the biggest deal in the sector to date.
The shareholders of Asset Alliance have sold a 25% stake in the business to Amabubesi Investments (20%) and Bamaka Investments (5%). As part of the deal, both BEE shareholders will play an active strategic and management role in Asset Alliance. Both groups will also have a combined voting right exceeding 25%.
Amabubesi is one of the country’s leading BEE companies. It’s primarily an investment company and currently owns a stake in various listed and unlisted companies in South Africa. It is headed by chairperson Bulelani Ngcuka and CEO and the founder of Nkonki, Sizwe, Ntsaluba — Sango Ntsaluba.
Bamaka Investments is the BEE vehicle for Asset Alliance’s existing black management and is headed by Asset Alliance executive director Balisa Mangxaba.
The new partnership will see Amabubesi appoint two non-executive directors to Asset Alliance’s board, which effectively increases black board representation to 57%. Ntsaluba will be the group’s new chairperson.
Asset Alliance CEO Rael Levitt says the deal is the first of its kind in the South African auction industry where both management and existing staff have taken a stake in the business. He says that both BEE investors will play a key role in taking the business forward.
Levitt says the auction industry and valuation industries are worth about R10-billion a year and expects substantial growth driven by the public sector.
“Whilst our group has strong organic and acquisitive growth over the last three years, we anticipate huge opportunities relating to the privatisation of state assets and work relating to various government departments.
“We have always believed that auctions are a first-choice method of asset disposal in the public sector. Auctions represent the best method for government to sell off assets because it’s open and transparent,” says Levitt. — I-Net Bridge