Case studies

"We have concluded some 200 transactions to date"

Fidelity security group

Fidelity Security Group

MBO

In 1990, RMB Corvest funded the management buy-out of Fidelity Guards from Rennies Group in a transaction that saw the management team take control of the security guarding business. The shareholders then embarked on a strategy to build a multi-service guarding, cleaning, hygiene and cash-in-transit business and the business grew from strength to strength over the next 15 years, acquiring Elweirda, Supercare and Springbok Patrols along the way.

Unbundling

In 2005, in a bid to realise value for shareholders and introduce black economic empowerment, RMB Corvest facilitated the unbundling of the group and partly funded the exit of the original management team. The group was unbundled into guarding, cleaning and hygiene (Supercare) and cash in transit. Simultaneously, RMB Corvest funded the introduction of meaningful black empowerment into the businesses. The unbundling enabled the operational management teams in the different business units to acquire a shareholding and this direct financial interest drove significant shareholder growth thereafter.

In 2008, the Fidelity Cash-in-Transit business was sold to UK-based G4S and in 2011, Supercare Services Group was sold to the multinational cleaning business, Compass Group. Both transactions realised significant value for shareholders.

Second-Round BEE

The Fidelity Security Group, now predominantly a guarding and security services business has continued to grow and during 2012, the original BEE investors needed liquidity and signaled an intention to realize their investment. The Group was re-geared, facilitating shareholder wealth creation, management increased their shareholding in the business and RMB Corvest co-funded the introduction of Shalamuka Capital and New Seasons Holdings as the primary BEE partners in a deal that saw the Fidelity Security Group retain its “black owned” status.

RMB Corvest does not have exit timing pressures and we continue to be a shareholder in Fidelity Security Group, thus illustrating our track record as a long term investor where it makes commercial and strategic sense.


Davita trading

Davita Trading

In 2008, after many years of successfully building the business, the founders of Davita Trading (who were also the senior management team) made a decision to seek a medium term exit for themselves. RMB Corvest acquired a majority stake in the powdered beverage and food flavourants manufacturer in 2008 and assisted the founders in considering various options to achieve a full exit for themselves over the medium term. This entailed either developing a management succession plan and buy-in to ensure the long term sustainability of Davita Trading or finding an appropriate trade buyer who could introduce a new management team. Just 3 years later, in 2011, RMB Corvest and Management secured a deal with Tiger Brands to acquire 100% of Davita Trading for R1,6 billion, resulting in both significant value creation for the exiting shareholders as well as ensuring the long term sustainable future of a successful business.


Servest groupServest group

Servest Group

In 2006, RMB Corvest and Safika Investments funded the buy-out of African Merchant Bank’s shareholding in Servest, in a transaction that saw the management team take control of the business. The transaction also maintained the BEE credentials of Servest. Since the initial investment, Servest has actively sought to supplement organic growth with acquisitive growth. It acquired two RMB Corvest portfolio investments, Industrial Health Services and Plants At Work, in addition to numerous other small investments. These acquisitions significantly enhanced Servest’s offering to its South African customer base.

Recognising an opportunity to take the Servest model offshore, the shareholders then decided to build a service portfolio through acquisitions in the UK. Thus in 2007, Servest and RMB Corvest acquired a controlling interest in Ecocleen Holdings (subsequently rebranded as Servest), a cleaning business focused on the retail sector in the UK. Following this initial offshore investment, RMB Corvest has assisted Servest UK to acquire additional businesses in that market, focusing on cleaning in the commercial and public sectors, as well as businesses providing security and catering services.

In 2015 a large BEE conglomerate, who wanted to grow their South African and African footprint in the facilities management sector, acquired RMB Corvest and Safika Investments’ shareholding in Servest South Africa, realising a significant return for the parties and positioning Servest South Africa as a black controlled company.

RMB Corvest remains invested in Servest UK. Growth and expansion capital is an important aspect of RMB Corvest’s funding strategy and we are comfortable to continue supporting a “build and grow” strategy for Servest UK, with further acquisitions in the UK currently being explored


OZZ industries

OZZ Industries

Ozz Limited, a heavy engineering firm focused on the mining and industrial sectors, used to be listed on the JSE. In 2003, RMB Corvest led a consortium to delist Ozz as part of a leveraged buy-out and run it as a private company called Ozz Industries. The Company comprised two distinct business units being Ozz Foundries and West Rand Engineering. In 2008, Scaw Metals, a division of Anglo American, acquired Ozz Industries with a view to boosting its own foundry business. West Rand Engineering was not included in the sale to Scaw Metals and RMB Corvest partnered Management and bought the West Rand Engineering business out of Ozz Industries in a management buy-out.

Our partnership with Management has been very successful and we continue to be an active investor in West Rand Engineering. In 2012 we re-leveraged the business and engineered a second-round management buy-out, thus facilitating liquidity for retiring management members and providing younger management with an opportunity to acquire a shareholding in the business. Simultaneously, we provided finance for the acquisition of a small complementary business into the West Rand Engineering fold.


Kwikot

Kwikot

In 1999 Corvest provided equity funding for the management buy-out of Kwikot from the listed company Boumat Limited. With the input from RMB Corvest, management embarked on a growth strategy through the modernisation and expansion of the manufacturing plant to be comparable with first world hot water geyser manufacturing plants, and by adding additional product lines to the existing sales and distribution facilities. A large investment was also made in purpose-built distribution outlets in the major cities in South Africa.

In 2016 the shareholders of Kwikot secured a deal with Electrolux to sell 100% of Kwikot for an enterprise value of in excess of R3-billion, resulting in both significant value creation for the existing shareholders, as well as securing an international owner of the business and ensuring the long term sustainability of the business.


Provest group

Provest Group

Provest Group is a mining support services business specialising in a range of services including the production and distribution of premixed concrete for mine shaft support and mining construction, shotcreting services, anchoring and contract mining, focused predominantly on the PGM, gold and manganese mining sectors. RMB Corvest initially funded Zico Capital to acquire 20% of the business in early 2011 and through a series of follow-on investments in subsequent years, has boosted Zico Capital’s shareholding to 44% and Provest’s ownership status to that of a Black-owned and controlled Group with a significant Black Women ownership element. Provest’s BEE profile positions the Group ideally to grow its presence in its chosen markets and continue to offer expert services to blue chip clients.