Stellar Capital finds buyer for Amecor

December 18, 2018





The investment group put its security communication equipment subsidiary up for sale after unsolicited buyers came forward for the group.


Stellar Capital Partners Stellar Capital bounced towards the end of last week after it announced the sale of Amalgamated Electronic Corporation (Amecor) for R413 million to private equity group Carlyle.



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The investment group is selling Amecor, a supplier of security communication equipment and networks, as it reduces its exposure to the industrial sector and focuses on the financial sector. Fund manager Prescient is already the biggest contributor to its sum-of-the-parts valuation (SOTP) - although its stake in Prescient will reduce from 49% to 19.4% following a recently-announced empowerment transaction.


Stellar said it decided to sell Amecor after receiving a number of unsolicited expressions of interest earlier this year at attractive valuations. It said it would use the proceeds of the disposal to redeem its preference shares and strengthen its capital structure.


The disposal will result in a capital profit of R144 million for Stellar Capital, which represents a significant return on capital deployed, in addition to R90 million of dividends received during the holding period (29 months)," the group said.


Torre Industries, in which Stellar holds a 57% stake, is under offer from private equity firms Ethos and Apex Partners and has already proposed delisting as a precursor to raising its black ownership.

The transactions could also help narrow the discount between Stellar's share price and its SOTP valuation, which sits at about R1.12.


Its shares closed 4.1% higher at 76c on Friday. On Thursday, they rose 7.4%.






Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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