Nasdaq-listed asset management multinational Carlyle Group will acquire emerging markets-focused occupational health and safety training company Nosa Group from JSE-listed Micromega Holdings for up to R747.8-million.
The occupational health and safety sector is particularly attractive across emerging markets as adoption and compliance rates align with developed countries, Carlyle sub-Saharan Africa Fund MD and head Eric Kump said in a statement on Friday.
“We look forward to using our experience in the business services sector, as well as our global network, to support Nosa’s strong brands to grow additional markets.”
Micromega announced in a separate statement that, after acquiring lossmaking Nosa in 2005, the business grew substantially to generate after-tax profits of R68.8-million for the financial year ended March 31.
“To maintain the historical growth levels, it has become a business imperative [for Nosa] to focus on new products, services and markets, both locally and internationally. At a strategic level, the capital investment required to service growth in these areas does not form part of the Micromega long-term capital allocation plan,” Micromega stated.
It added that a large, well-capitalised organisation is ideally positioned to make such investment and, thereby, ensure Nosa is able to expand its operations and thereby resume the historical growth levels, Micromega said in the statement.
“Nosa has experienced strong growth over the last decade, annually educating and serving more than 90 000 individual learners and professionals, as well as more than 4 000 organisations, to ensure a safe and compliant working environment in emerging markets around the world. The investment by Carlyle will support the ongoing growth of Nosa while allowing us to realise value for our shareholders,” Micromega CEO Greg Morris said.
For some time now, the value of Micromega’s underlying businesses has substantially exceeded its market capitalisation. There is no indication that this will change in the foreseeable future and it is, therefore, incumbent on the board to look for opportunities to consider disposal if such sales can provide greater value to shareholders – by way of distributed dividends from the sale proceeds – than the prevailing price of the share.
Micromega noted that the disposal was well priced to deliver such value for shareholders.
Equity for this transaction will come from the Carlyle sub-Saharan Africa Fund; the ninth investment to be made by this dedicated fund. The transaction is expected to close in the first quarter of 2018, subject to regulatory approvals and other conditions, Carlyle Group stated.
Andy Fenn has, meanwhile, been appointed CEO designate of Nosa. He will assume the role of CEO once the transaction has been finalised and the necessary approvals obtained.