KTH eyes Africa
Unlisted investment holdings companies Kagiso Trust Investments (KTI) and Tiso Group (Tiso) both focused on pursuing investment opportunities in the BEE space. A merger in 2011 saw the creation of Kagiso Tiso Holdings (KTH) and a change in strategy away from a focus on BEE opportunities to becoming a Pan-African investment company. CEO, explains its new strategy. ince the mid-2011 merger between KTI and Tiso, the KTH team has been busy forging its footprint on the continent. In line with its strategy to grow its portfolio beyond SA borders, particularly into the West and East African regions, KTH bought a 15% stake in Fidelity Bank in Ghana for around $35m (R400m) 18 months ago. An investment, says CEO Vuyisa Nkonyeni, that is already showing considerable growth in both dollar and rand returns.
Other recent acquisitions include a 40% stake in Nigerian-based healthcare diagnostics company Me Cure Healthcare (Me Cure), in July, which also allowed them to diversify into the healthcare space.
Back on local soil, KTH concluded t he acquisition of a 51% stake (at a price tag of just under R1bn) in facilities management company Servest, in June. While approximately 50% of its earnings and revenues are from SA, it also has a presence in east, west and southern Africa and in the UK.
“Servest ticks all the boxes in terms of the type of asset we were looking for,” says Nkonyeni.
“Firstly, it is in the services sector, which we view as an attractive and high growth sector, and has a diversified service offering. It also has strong defensive qualities, and is therefore likely to outperform on a relative basis in both good and challenging economic cycles. It is also highly cash generative and in terms of size has a large market capitalisation that meets our size requirements. Finally, the business has a very strong and capable management team that has historically been able to deliver attractive returns consistently to its shareholders.”