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Mettle-some move by Metropolitan Capital

30 July 2008 Metropolitan Capital

Metropolitan Capital has facilitated a management buyout of the well-established and highly reputable financial solutions provider, Mettle, from Hosken Consolidated Investments Limited.

The buyout, which has received Competition Tribunal approval, was funded by Metropolitan Capital, which has also acquired a significant minority shareholding in Mettle.

Metropolitan Capital, a wholly-owned subsidiary of Metropolitan, was established in August 2007 to pursue alternative investments on behalf of the group.

Mettle has consolidated its position as an independent financial intermediary serving a diverse portfolio of corporate and institutional clients and has expanded its own proprietary lending businesses.

Debt origination, structuring and advisory, property development finance, bridging finance, retail finance and the provision of term financing options for vehicles and other assets are key areas of focus where Mettle has carved a niche for itself on the basis of extensive expertise and experience.

Mettle’s commitment to the affordable housing sector has led to the establishment of a Financial Sector Charter (FSC) compliant fund to the value of R750 million which has strong institutional backing.

Commenting on the transaction, Peter Judge of Metropolitan Capital, said “Mettle has an enviable reputation for innovation, and the Mettle brand is well established in the SA financial services industry. Through organic growth, management has succeeded in diversifying the company from a structured finance house to a broad-based financial services group, with a healthy balance of annuity and fee income. We believe Mettle is poised for dynamic expansion in the medium term.”

Friedrich Esterhuyse (pictured above right), chief executive of Mettle, comments “Management is confident that the company is strategically and operationally well positioned to be able to capitalise to the full on the wealth of opportunities awaiting it in this exciting new era. Mettle is excited to have Metropolitan as a significant shareholder and partner.”

Mettle Overview

 

The Competition Tribunal has approved the acquisition of financial services business, Mettle, from Hosken Consolidated Investments Limited (“HCI”) by a consortium comprising Mettle senior management and Metropolitan Capital (Pty) Ltd, a subsidiary of Metropolitan Holdings Limited. A new holding company, Mettle Investments (Pty) Ltd, has acquired the Mettle brand and the operational businesses of Mettle.

Mettle has in recent years consolidated its position as an independent financial intermediary serving a diverse portfolio of corporate and institutional clients, as well as expanding its own proprietary financial businesses.

Mettle Specialised Finance (“MSF”) focuses on debt origination and structuring solutions for its corporate clients, and manages a growing portfolio of several billion rand of term debt. Its specialist range of services include asset backed securitisation, syndicated loans, credit enhanced debt, and debt origination and underwriting. The team is able to source funding from a wide range of debt investors (i.e. asset managers, banks and life assurance companies), which promotes a competitive funding environment for the benefit of its clients. In addition, MSF offers yield enhanced short term investment products and foreign exchange risk management solutions. Mettle recently acquired 25,1% of Impex Treasury Solutions (Pty) Ltd which provides importers, exporters, and fund managers with expert advice and products to minimise currency risks.

Mettle Property Finance (“MPF”) is a niche provider of property finance solutions. One of its focus areas is property development finance for the affordable housing sector for which a Financial Services Charter compliant institutional-backed fund of R750 million has been successfully established. Other property finance products include land acquisition and rezoning finance, development finance, end user finance, term loan origination, and equity and mezzanine finance for property developers.

Mettle Bridging Finance operates nationally in the bridging finance arena. Products include bridging finance to facilitate cash flow on property transfer transactions; bridging finance to SME’s secured by mortgages over fixed property; and invoice factoring services.

The Mettle Vehicle and Asset Finance Division (“MVAF”) provides term financing solutions to the vehicle and asset financing industry, as well as outsourced debtor management services. This business was acquired after significant restructuring took place. Highly experienced personnel were hired and key functions, previously outsourced, were brought in-house.

In addition, Mettle owns 51% of Lendcor (Pty) Ltd (“Lendcor”), a specialised retail finance company. Lendcor provides retail credit to individuals for the purpose of acquiring building material. This is achieved through a network in excess of 600 building supply merchants. Lendcor’s origination platform is expanding geographically and through a Lendcor savings and debit card that provides banking services to its customers in remote areas.

Further niche lending businesses that take advantage of credit and margin arbitrage opportunities and other financial services opportunities have been identified. These opportunities will leverage the infrastructure that has been created and management believes that, with Metropolitan as a new partner, the group is well positioned for significant growth.

 

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