DBF Capital offloads 3G Mobile stake

PRIVATE equity, investment banking and financial advisory concern, DBF Capital Partners together with other shareholders, have offloaded their stake in 3G Mobile Proprietary Limited, a South African-based company which distributes mobile phones, tablets, and accessories to retailers, companies, and individuals across Sub-Saharan Africa.

DBF is a Mauritius-based investment holding company owned by local entrepreneurs Doug Munatsi, Francis Dzanya and Bhekithemba Moyo, who are former executives of BancABC.

DBF Capital is among the shareholders of 3G Mobile, which is also owned by other investment vehicles which include Wild Rose Capital and others. Telecoms giant, Blue Label Telecoms, is acquiring 100 percent of 3G’s issued share capital, through its wholly owned subsidiary The Prepaid Company Proprietary Limited (TPC).

Blue Label said in an announcement: “3G Mobile shall be utilised as Blue Label’s expansion platform into the financing and supply of mobile devices, handsets and allied products,” adding that 3G Mobile provides the ideal platform to consolidate Blue Label’s low cost and certified pre-owned mobile handset divisions into a consolidated group.

The announcement also marks DBF Capital’s first deal exit. The shares in 3G Mobile will be acquired in two stages, with the initial acquisition by TPC of 47,37 percent of the issued share capital of 3G for a purchase consideration of R900 million ($69,8 million) being subject to a number of conditions. Among the conditions, Blue Label should first confirm its satisfaction with the results of its due diligence and obtain necessary third party consents.

The acquisition of the remaining 52,63 percent of the issued share capital of 3G Mobile for a purchase consideration of R1 billion ($77,65 million). The second acquisition is subject to satisfying the initial acquisition become unconditional in accordance with its terms, with any regulatory approvals being met.

The initial 3G purchase consideration will be settled with the issuance of R250 million which will be settled by the issue of Blue Label shares to the 3G Vendors and R650 million in cash, on a deferred basis. The subsequent 3G purchase consideration will be settled in cash.

“The cash consideration of R1,65 billion will be funded either from available cash resources, a further placement of shares, banking facilities or a hybrid thereof,” said the statement.

Meanwhile, 3G Mobile posted a net profit after tax of R248 million for the year ended December 31, 2016, after adjusting for non-recurring expenditure. It is expected that its net tangible assets will be no less than R1 billion as at the effective date of the initial acquisition. — Wires.