BUSINESS LIVE / 25 NOVEMBER 2018 - 19:17 /MARC HASENFUSS
Mergence Group makes bold play by acquiring 51% stake in BFG Africa
Financial services boutique Mergence Group has made a bold play to create a black-owned industrial conglomerate by acquiring a 51% stake in BFG International Composites (Africa).
Mergence MD Masimo a Badimo Magerman says BFG Africa will be aggressively expanding its infrastructure, mining, automotive, transport and architectural footprint across Africa. Picture: ISTOCK
The value of the deal was not disclosed but Mergence MD Masimo a Badimo Magerman said BFG Africa was the first of an envisaged series of deals to build an industrial silo that could be listed on the JSE.
Bahrain-based BFG International will retain the balance of the shares in BFG Africa.
“We would like to build a business with revenues north of R1bn before looking at a possible JSE listing.”
He said BFG Africa would be aggressively expanding its infrastructure, mining, automotive, transport and architectural footprint on the African continent.
“The rationale for the on-balance-sheet acquisition is to provide BFG International with a local BEE partner that can assist with unlocking further opportunities in the composites space.”
Magerman said the BFG plant in SA would officially be launched in January 2019. He pointed out that BFG Africa was appointed in September 2014 by Gibela Rail Transport Consortium to clad the interiors of a fleet of 600 commuter trains that will be supplied to the Passenger Rail Agency of SA (Prasa) over a 10-year period.
The advantage of BFG’s composites — which use glass made from silica — consume very little energy in the manufacturing process, and do not generate green house gases of fluorocarbons.
Mergence — founded in 2004 by Magerman and Izak Petersen (the CEO of Dipula Income Fund) — is also looking to build hubs in financial services and food security.
The financial services segment, which is anchored around the R32bn assets under management at Mergence Investment Managers, already has considerable traction. There is also Mergence Africa Capital (the only 100% black-owned derivatives trading desk in SA), Mergence Africa Property (which owns a stake in the R8bn Dipula Income Fund), Mergence Corporate Solutions and Mergence Credit Africa.
As regards food security, Magerman said Mergence was focusing on Africa, and had already created Mergence Commodity Finance and is exploring trade commodity opportunities in Senegal and Ghana.
LINK : https://www.businesslive.co.za/bd/companies/industrials/2018-11-25-deal-with-bahrain-group-will-create-a-black-owned-industrial-conglomerate/
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER