OLD MUTUAL PRIVATE EQUITY AND SPHERE TO ACQUIRE MUCH ASPHALT
4 November 2024 – Old Mutual Private Equity (OMPE) and Sphere Investments (Sphere) today announced that they have concluded an agreement with Johannesburg Stock Exchange listed AECI Limited to acquire 100% of Much Asphalt alongside the Much Asphalt Management team.
The deal is valued at R1.1 billion and will be financed through a combination of debt and equity.
Much Asphalt is Southern Africa’s largest commercial manufacturer of asphalt and bituminous binders and emulsions, with its products principally being used in the road surfacing industry. Their product range includes high volume Asphalt surfacing as well as an asphalt recycling unit. The company has an unmatched national footprint, and is the only player with a nationwide presence in South Africa, which strengthens its offering.
Bennie Greyling, Managing Director of Much Asphalt states that: “We have built a solid business that is well-placed to benefit from the catch-up in the road infrastructure spend backlog in the country.”
OMPE stated that they believe that an investment in the country’s road infrastructure, will be a key enabler of economic growth and job creation, aligns and with the objectives of the Government of National Unity. The company believes that the company is well-positioned to play a meaningful role in South Africa’s road infrastructure spend over the medium to long term.
First Investment for OMPE’s Fund VI
This transaction marks the first and anchor investment in OMPE’s newly launched OMPE Fund VI. OMPE and Sphere will partner with the management team over the investment tenure and will seek to generate transformative growth and business transformation in order to provide an attractive return to the fund investors and contribute meaningfully to the lives of the employees and communities within which the company operates.
Jacci Myburgh, Co-Head of OMPE said: “We have confidence in the infrastructure repair initiatives under the new South African Government and actively look to invest behind sectors that we think will recover to more normal levels over the medium to long term, compared to a volatile and abnormal last ten years for the South African economy. An effective road network is critical to the exciting re-build that is underway in South Africa, which should stimulate economic growth and lead to the creation of new jobs. Much Asphalt is a clear market leader and we look forward to working alongside the management team to grow the business.”
Mohammed Sabi, Director at Sphere, a leading Black investment holding company, commented on the deal saying: “Road infrastructure plays a pivotal role in enabling economic development, connecting South Africans and empowering previously disadvantaged communities in isolated parts of our country. Our investment in Much Asphalt is a continuation of our 21-year track record of investing in high quality businesses which supply critical goods and services to their customers.”
The transaction is expected to close during the first quarter of 2025, subject to customary regulatory approvals.
