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| TRANSACTION SUMMARY |
| Baobab Solid Growth |
Investment Date: July 1994
Sector: Financial Services
Invested Capital: R6 million ($2 million)
Realised value: R3,300 million ($515 million)
IRR: 208% |
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| DESCRIPTION |
Baobab Solid Growth was formed in 1994 with initial capital of R6 million ($2 million). The company was listed on JSE Securities Exchange (“JSE”) as an investment company controlled indirectly by the Hollard Group in 1995.
During the course of the next four years, Baobab began a process of consolidating the then fragmented micro-finance sector in South Africa, a process that saw the company change its name from Baobab Solid Growth to Theta Group Limited in 1997. The various acquisitions took the share price from R3.50 per share ($0.96 per share) to an effective R240.00 per share ($66.00 per share) over a four year period.
In 1999 Hollard Group sold its remaining 40% stake in Theta Group Limited to New Africa Investments Limited (“NAIL”) for R3,300 million ($%15 million). In the same year Theta Group was renamed African Bank Investments Limited, which remains listed to this day.
Hollard was able to achieve a multiple of 35 times its investment in Baobab. The IRR on the transaction was 208%. |
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| TRANSACTION SUMMARY |
| Clientele Life |
Investment Date: June 1997
Sector: Insurance
Invested Capital: R187 million ($41 million)
IRR: 51% |
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| DESCRIPTION |
Clientele Life was acquired by the Hollard Group in 1997 for R187 million ($41 million). Clientele Life is a stand-alone life insurer which markets through TV advertising, telesales and a multilevel marketing operation. It was the first brokerage to use this marketing method in South Africa . Once purchased, Clientele was reversed into the Crusader Insurance listed shell, which had been acquired for this purpose. This provided Clientele with the platform and license to grow rapidly in the direct life insurance market. Clientele now earns approximately R100m ($14 million) pre taxation profit per annum.
Clientele has accumulated substantial expertise in database management and cross-selling, providing a strong platform for future growth. CVI currently owns ±80% of the shares in Clientele.
Based on market prices as at June 2007, Capricorn has realized a multiple of 13.0x on its investment in Clientele. The IRR of the transaction is 51%. |
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| TRANSACTION SUMMARY |
| NAIL Media |
Investment Date: October 2003
Sector: Media
Invested Capital: R252 million ($38 million)
Realised value: R335 million ($56 million)
IRR: 45% |
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| DESCRIPTION |
In October 2003 CCP worked with the TISO Consortium, a BEE group, in a public market restructuring of New Africa Media. New Africa Media was the rump business of New Africa Investments Limited. The total amount invested by Capricorn was R252 million ($38 million). The Consortium acquired control of NAIL and subsequently embarked on a process of disposing of the media assets.
All material assets have now been disposed of and cash has been returned to shareholders. The Capricorn team played an integral role in successfully gaining control of NAIL and overseeing the disposal of assets. The disposal process resulted in CCP receiving R355 million ($56 million) in proceeds over the period 2003 to 2006.
Capricorn realized a multiple of 1.41x on its investment in NAIL Media. The IRR on the transaction was 45%. |
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| TRANSACTION SUMMARY |
| Eurosteel Holdings |
Investment Date: March 2006
Sector: Steel
Invested Capital: R37 million ($6 million)
IRR: 100% |
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| DESCRIPTION |
Eurosteel Holdings is the second largest stainless steel distributor in South Africa and has significant activities in aluminium distribution and downstream steel processing. Capricorn acquired an indirect 14% stake in Eurosteel in March 2006 when it facilitated a BEE transaction for the Company, whereby the Isitali Consortium acquired a 35% stake in Eurosteel. Capricorn owns 40% of the Isitali Consortium. Capricorn made a further direct investment of 10% in Eurosteel in August 2006. Capricorn’s total investment in Eurosteel is R37 million ($6 million). Capricorn plays an active role in supporting Eurosteel management in strategy development, corporate finance, organisational development and operational strategy.
Eurosteels’ turnover for the year ending February 2007 was R727 million ($100 million) with profits after tax of R68 million ($9.5 million). Capricorn remains invested in Eurosteel, and based on Director’s valuations as at June 2007, Capricorn has realized a multiple of 1.8x times capital invested, and an IRR of 143%. |
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