Absa Capital-backed consortium takes over leading plastics firm Safripol
An Absa Capital-backed consortium has concluded a leveraged buy-out whereby it acquired the business of Safripol, one of South Africas leading manufacturers of high volume plastics, from Sentrachem Ltd.
Sentrachem is wholly-owned by The Dow Chemical Company ("Dow"). It was acquired by Dow, an American multinational corporation in 1997, after which Sentrachem delisted from the JSE.
The transaction opportunity arose when Dow decided to dispose of the Safripol division as it wishes to focus its investment priorities in other regions, particularly in the Middle East and China.
The consortium has taken over the business as a going concern and its investment will enable technical, product mix and capacity enhancements.
It will also allow the business to be run more entrepreneurially as opposed to being a relatively small division of a global corporate. Safripols customers will benefit from a supplier that will base its future long-term success on the continuous delivery of quality products by maintaining and increasing its technology base and service standards.
Going forward, Safripol will be led by Joaquin Schoch (chief executive officer), Geoff Gaywood (chief operating officer) and Frans van Dyk (chief financial officer), while Absa Capital will have board representation. The introduction of new leadership into an already-strong management team and dedicated staff compliment is regarded as key to enhancing the already-successful business.
We are furthermore pleased to announce that Mike Leeming, a former executive director of Nedcor Ltd, has accepted the position of non-executive chairman of Safripol and we would like to welcome Mike and Absa Capital to our team, said Safripols CEO, Joaquin Schoch, at the conclusion of the private equity transaction.
The primary value uplift of the transaction will be achieved through entrepreneurial leadership, planned expansion projects and technological improvements in the products. "This is not just another private equity deal but, rather, the establishment of a long-term strategic relationship between Absa Capital and Safripol. Safripols new management team is well-balanced, with strong corporate governance credentials alongside technical knowledge on the manufacturing processes and entrepreneurial flair. Both parties are committed to broad-based participation and we shall introduce a suitable BEE partner in the shareholding in the near future," concludes Andre Pieterse, head of Equity Investments at Absa Capital.
