Goldman Sachs Group, US based global investment and banking firm, said it expected the number of public offering in South Africa to jump this years lifted by private equity investors exiting their positions by selling shares through the bourse, Bloomberg reported.
Goldman Sachs was the top underwriter of initial public offerings last year in Africa’s largest economy, when , 12 companies went public on the Johannesburg stock exchange, unchanged from 2012 and lower than the 16 listings in 2011.
“There could be a new wave of listings because of private equity portfolio exits,” Colin Coleman, head of Goldman Sachs for sub-Saharan Africa, told Bloomberg in an interview, but did not disclose which companies might go public other than the retirement-fund administrator Alexander Forbes Ltd., that’s already announced plans for an IPO in the second half of this year.
Forbes, bought by private equity investors, including Actis LLP and Ethos Private Equity Ltd., for 8.2 billion rand ($757 million) in 2007, has hired Deutsche Bank AG and Rand Merchant Bank to advise on an IPO.
Retailer Edcon Holdings (Pty) Ltd., acquired in 2007 by Bain Capital Partners LLC for $2.5 billion, may consider a listing, according to analysts cited by Bloomberg.
Mergers & Acquisition
A Ernst & Young report last month said emerging-market initial share sales will gain speed this year with economic conditions “steadying” and the reopening of mainland China exchanges in 2014. That will result in at least 50 IPOs in the first quarter, it said, with technology, real estate and financial companies to dominate this year’s listings.
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“(Other) opportunities for investment banks include refinancing, risk management, the restructuring of asset pools and balance sheets,” Coleman told Bloomberg. Mergers and acquisitions, which declined as South Africa’s growth fell to the slowest pace in more than four years in the third quarter, may also be on the agenda, he said.
“There will be mergers and acquisitions in South Africa, I’m just not relying on it,” Coleman said, adding that Johannesburg will remain the entry point for investment elsewhere in the continent. “One of the key themes remains how to buy into Africa and South Africa is the platform.”
While cross-border transactions may slow in South Africa before general elections by July this year, there will be domestic deals and the rest of continent will remain active, Coleman added.
“The biggest issue for the year is the team that gets put in place post the election,” Coleman said. “We need to see the depth and quality of the administration — not just in the financial portfolios, but also mining, public works, education.”