Long4Life’s Brian Joffe blames pricey valuations for drop in buyouts
Valuations of target companies remain expensive despite the weak macroeconomic environment, says Brian Joffe, CEO of deal-hungry investment group Long4Life. Joffe, who founded Bidvest and Bidcorp, has been on the hunt for acquisitions since his latest venture raised R2bn from the sale of shares when it listed in April 2017. But a major deal — the mooted R3.9bn acquisition of footwear and clothing retailer Rage — recently fell through after investors complained Long4Life would have been forking out too much for the asset.
Joffe said on Wednesday that Rage was a fast-growing business, but "its cash conversion was just too low" for his company. The failed transaction cost Long4Life R3.6m. He said acquisitions were "a slow process", partly because valuations had not normalised despite the weak economy. Since listing, Long4Life has spent R3.4bn on deals, which meant it was "only about half invested", Joffe said. Its recent acquisitions include Holdsport’s Sportsmans Warehouse, Outd...