Kagiso Trust InBrief Issue#17 August 2015 Aug 2015 | Page 28

www.kagiso.co.za

KTH acquires 51% of Servest
in a landmark transaction

J

ohannesburg based investment holding
company, Kagiso Tiso Holdings (“KTH”)
announces the successful acquisition
of a 51% shareholding in the Servest
Group (“Servest”) to form the largest,
majority black-owned, facilities management
company in Africa, in a transaction valuing
the group at approximately R4.5 billion. 

black-owned, but it represents so much more
than just an empowerment transaction,”
says Kevin Derrick, Chief Executive Officer of
Servest. “This not only clearly demonstrates
our ongoing commitment to transformation
and long term sustainability, but brings with
it significant opportunities for future growth,
expansion and job creation.”

The Servest investment offers a compelling
proposition, consistent with KTH’s strategy,
as the business has significant presence in
South Africa, United Kingdom and the rest of
Africa with multi-currency earnings. Servest
provides integrated facilities management
solutions to more than 6 500 clients on 24
000 sites in South Africa, with key markets
in East, West and Southern Africa as well as
the United Kingdom. Key services include
inter-alia cleaning, parking, catering, hygiene,
office service, landscaping to prominent
clients such as Transnet, Netcare Group,
Anglo Platinum, Debswana, Sasol, Sainsbury,
BBC and UK’s House of Parliament among
others.

KTH’s Chief Investment Officer, Jacob
Hinson, said: “Our investment strategy
seeks to achieve active participation in
fewer, prominent investments, with strong
management teams that will drive growth
across the continent. Servest is a unique
investment that meets all our criteria.
We were therefore able to execute this
transaction on pure commercial terms
without any external or vendor facilitation
with an equity cheque of approximately R1
billion. We look forward to working with our
new partners to create a truly global facilities
management business. “

Commenting on the acquisition, Vuyisa
Nkonyeni, Chief Executive Officer of KTH,
said: “This transaction demonstrates clear
delivery against KTH’s strategy of acquiring
meaningful or majority stakes in fast growing
companies which are supported by strong
management teams and have good exposure
to African market opportunities. In the South
African market, we will identify investments
that will afford us significant influence or
control alongside like-minded partners.”
The transaction makes Servest the largest,
majority black-owned, facilities management
company in Africa, strongly positioning it to
expand its footprint across the rest of the
continent. In the South African context, this
will give Servest an advantage over other large
facilities management companies, with over
51% black ownership, under the new revised
BEE codes which came into effect on 1 May
2015. As part of the transaction, KTH and CoFounder, Mr Kenton Fine, will facilitate equity
participation of management as part of a
talent management and transformation plan.
“This deal means that Servest is now 51%

KTH has been executing its strategy
of becoming an emerging pan-African
investment champion, having concluded
transactions which involved R5.1 billion
of disposals, follow on investments and
portfolio company restructurings to date;
R3.3 billion of new deals since 2011, including
a maiden pan-African investment in Fidelity
Bank and a landmark minority take-out and
delisting of Kagiso Media in 2013. In addition
to this transaction, KTH expects to conclude
another significant acquisition in West Africa
imminently.
Servest Co-founder and Group Chairman,
Kenton Fine, said, “We have enjoyed a very
successful and long-standing relationship
with our exiting shareholders, RMB Corvest
and Shalamuka, and are delighted at the
prospect of partnering with a professional
organisation of the calibre of KTH. With similar
values entrenched in both organisations, we
look forward to embracing the additional
experience and knowledge that KTH will
bring, further underpinning our continued
ambitious growth strategy into the future“.
Beyond the commercial rationale, both
parties see the transaction as an important

28| Kagiso Trust InBrief August 2015

step in driving further transformation at
Servest. The company has embarked on an
ambitious staff development drive and the
establishment of the Management Trust
reinforces its commitment to transformation. 
The KTH-Servest acquisition remains subject
to regulatory approvals including South
African Competition Commission approval.

About KTH
KTH is one of the largest pan African
investment holding companies with an
investment portfolio comprising of market
leading companies across its chosen sectors
and geographies. The group has an asset base
in excess of R15 billion, a solid track record of
investment performance and is managed by a
professional and experienced team of African
investment professionals.
KTH is an active long term investment par