Today, in Pretoria, the Competition Commission approved a deal whereby the
shareholders of the Alliance Group have sold a 31% stake in the business to
financial services group, Transaction Capital. The deal, which values the
company at R250 million, will see the new shareholders actively growing
Alliance's speciality financial services offerings including the development
of a distressed debt and asset fund. The new shareholders will inject cash
into Alliance Group to grow new service offerings, fund acquisitions and
facilitate an exit of minority shareholders.
Transaction Capital is one of the largest independent service providers to
the financial services sector in Southern Africa. The Group comprises 14
wholly-owned subsidiaries and employs more than 3000 people in 5 countries.
Its subsidiaries include SA Taxi Finance, ATM Solutions and collections
group MBD Holdings. Transaction Capital recently appointed well known
entrepreneur Mark Lamberti, the non-Executive Chairman of Massmart Holdings,
as its Executive Chairman.
The new partnership which will see Transaction Capital injecting its
specialist private equity team into Alliance Group and appointing leading
corporate recovery specialist, Les Matuson, as an Executive Director to
Alliance Group's board to grow the group's advisory, restructuring and
distressed asset service offerings. Matuson has significant experience in
all aspects of distressed assets including national and cross-border
liquidations and corporate recovery. Prior to joining Alliance Group,
Matuson was the CEO and the founder of recoveries group, Credit Management
Solutions(CMS), which was acquired in 2007 by Transaction Capital.
Amabubesi Investments, managed by leading businessmen Sango Ntsaluba and
Peter Moyo, is one of the country's leading Black Empowerment companies. It
acquired a stake in the Alliance Group in 2006 and has now diluted
marginally to allow the entry of Transaction Capital through the
subscription of new ordinary shares.
Ntsaluba, who is also the Chairman of the Alliance Group, explains that the
company has been growing its other services offerings outside of the
company's traditional auction and valuation activities. "When we invested in
the Alliance Group the company was known only for being the country's
largest auctioneer, but substantial growth has been driven through a range
of other asset service offerings. The deal with Transaction Capital is part
of the group's strategy to become a fully fledged asset sales and services
Founded in 1998, Alliance Group currently sells, auctions and values a wide
range of assets, including inventory, real estate, industrial assets, plant
and machinery. Alliance sells in excess of R5 billion in assets and annually
values over R30 billion. The group employs 200 professionals and last year
began providing specialised financing products through its offices
According to Alliance Chief Executive, Rael Levitt "what started as an
auction company in Cape Town is now an integrated asset services group.
Markets have changed, especially over the past two quarters as liquidity has
become more difficult to obtain, particularly in special situations. Every
day you hear terms like credit tightening, foreclosure, valuation
uncertainty, market cool-down and financial distress - all of which are
affecting the current asset environment.
Alliance is truly a multi-cyclical business which capitalises on both
positive and negative economic cycles. We will now aggressively roll out a
series of new value-adding service offerings in the distressed debt and
asset space whilst maintaining our position as the country's leading auction
providers. The power of our business model is that we have a true
understanding of asset values and cycles, particularly when markets quickly
move up or down".