Supergroup

13/04/2011

Super Group sells stake in SG Fleet

Supply chain management company Super Group has sold a R273m shareholding in its Australian subsidiary, SG Fleet, to Champ Ventures (CV Funds), an Australian private equity firm specialising in growth companies in Australasia.

The transaction will see funds managed by CV Funds and some of SG Fleet’s senior management team become shareholders in the company, and bring local funding and expertise to its activities in the Australian market.

"I think what they are doing looks sensible given that this business is so far away," Gavin Wood, chief investment officer at Kagiso Asset Management, said yesterday. "They have kept control of the business, but enabled local partners and management to have a significant stake."

Under the agreement, CV Funds will buy 45,22% of the JSE- listed company’s redeemable preference shares, and 41,36% of ordinary shares in the subsidiary, through a new holding company, SG Fleet Holdings. SG Fleet managers will acquire another 8,54% of ordinary shares.

SG Fleet provides fleet management and salary packaging services to corporate and government clients across a broad range of industry sectors in Australia, New Zealand and Britain, including motor dealers, manufacturers and suppliers.

More than R100m of the transaction will be retained as cash in Bluefin Investments, a Super Group subsidiary registered in Mauritius, as reserve capital for future investment in SG Fleet. Super Group will keep about R14m.

Super Group said the transaction causes a 4,3% reduction in pro forma earnings per share for its unaudited interim results for the six months to December last year, but the enhanced growth prospects for SG Fleet outweighs short-term dilution of the business. Revenue for the period rose 10% to R3,8bn, with operating profit up 19% at R298m.

Profit after tax rocketed 112% to R173,3m, with headline earnings of R149,2m.

Source: Business Day