Business Venture’s buy-out of Waco gets the nod

WACO International, the diversified equipment hire and industrial services business that in 2015 postponed its planned JSE listing because of the fallout from the collapse of the scaffolding for the construction of the Grayston Road pedestrian bridge over the M1 in Johannesburg, is planning to sell the business.

The Competition Tribunal yesterday approved the sale of Waco to Business Venture Investments, a special purpose company established specifically for the proposed transaction.

The Competition Commission had recommended the unconditional approval of the transaction.

Waco, which has operations in South Africa, other sub-Saharan countries, Australia, New Zealand and the United Kingdom, in 2015 sought to raise up to R3.5 billion in the JSE’s biggest share sale that year, to facilitate the partial exit of private equity investors, when the listing was postponed.

Waco had supplied forming, shoring and scaffolding to Murray & Roberts, the main contractor on the R130 million bridge construction project.

The collapse caused two deaths and 23 injuries.

Stephen Goodburn, the chief executive of Waco International, said yesterday that private equity assets were turned between three and seven years, and the proposed transaction was an opportunity for the current shareholders to realise and exit their investment in Waco.Goodburn said the reason they did not proceed with the planned listing of Waco in 2015 and subsequent years was that market conditions were not conducive to a listing and the Department of Labour’s inquiry into the bridge collapse had not been finalised.

Difficult

“It makes it very difficult to put it into the market. The process around the inquiry is out of our control and is taking a very long time to complete,” he said.

Goodburn said they never felt there was a liability to Waco because they did not believe they were at fault for the collapse. However, they were insured against any negative outcome.

Goodburn was unable to comment on the terms of the proposed sale, including the sale price, because he was bound by a confidentiality agreement, but indicated the new owners had done their due diligence, understood what the inquiry was about, and had “made a call either way around the outcome”.

Nonhlanhla Msiza, appearing for the commission, told the tribunal yesterday that Business Venture Investments was active in the manufacture, import and distribution of fast moving consumable goods in the food and beverages, household and personal care segments. It intended to acquire 100 percent of the share capital in Waco.

Business Venture is a wholly owned subsidiary of Washington Cayman, which, in turn, is wholly owned by Abraaj Private Equity Fund VI, a private equity fund ultimately controlled by Abraaj Holdings.

In South Africa, Abraaj Holdings directly and indirectly manages private equity funds that directly and indirectly control Libstar Holdings, which focuses on supplying the food service industry and the private label segments of larger retailers, and on manufacturing products for brand owners.

Abraaj wants to expand Waco’s equipment rental and industrial service businesses in South Africa and selected markets outside of Africa.