|Less than two months after the Property Charter came into effect, Asset Alliance Ltd - holding company of both South Africa's largest auction and valuation companies Auction Alliance and Valuation Alliance –signed its BEE deal at a company value of R100m, the biggest deal in the sector to date. |
The shareholders of Asset Alliance have sold a 25% stake in the business to Amabubesi Investments (20%) and Bamaka Investments (5%). As part of the deal, both BEE shareholders will play an active strategic and management role in Asset Alliance. Both groups will also have a combined voting right exceeding 25%.
Amabubesi is one of the country's leading Black Empowerment companies. It’s primarily an investment company and currently owns a stake in various listed and unlisted companies in SA. Amabubesi is headed by Chairman Bulelani Ngcuka, and CEO and founder of Nkonki, Sizwe, Ntsaluba - Sango Ntsaluba.
Bamaka Investments is the BEE vehicle for Asset Alliance’s existing Black management and is headed by Asset Alliance Executive Director Balisa Mangxaba.
The new partnership will see Amabubesi appoint two non-executive Directors to Asset Alliance’s board, which effectively increases black board representation to 57%. Ntsaluba will be the group’s new Chairman.
Asset Alliance CEO, Rael Levitt says the deal is the first of its kind in the South African auction industry where both management and existing staff have taken a stake in the business. He says that both BEE investors will play a key role in taking the business forward.
Levitt says the auction industry and valuation industries are worth some R10 billion per annum and expects substantial growth driven by the public sector. “Whilst our group has strong organic and acquisitive growth over the last three years we anticipate huge opportunities relating to the privatization of state assets and work relating to various Government departments.
“We have always believed that auctions are a first choice method of asset disposal in the public sector. Auctions represent the best method for Government to sell off assets because it’s open and transparent,” says Levitt.
The deal currently places Asset Alliance well on the way to exceeding BEE ownership targets mapped out in the Property Charter. “Asset Alliance has ensured that 25% economic interest is held by BEE participants and that there is a 25% plus-one-vote participation by black people in voting rights,” says Levitt.
Ntsaluba says the deal was achieved well ahead the Property Charter’s five-year deadline, which was signed two months ago and will be the benchmark for transformation of the industry.
“In concluding this deal, both asset Alliance and Amabubesi have set up a company that will change the face of the auction and valuation industries by setting the benchmark for good corporate governance and fostering a better understanding of both industries among the private and public sectors,” says Ntsaluba.
Mangxaba says in addition to the equity deal, Asset Alliance has introduced a formal project to further transform the company. The project codenamed “Project AABEE” (acronym for Asset Alliance Black Economic Empowerment) will focus on transformation across all levels of empowerment.