Italtile sells stake to BEE entity
Yard Investments Holdings has bought 2% of Italtile for R312.2m
A company founded by New Development Bank (NDB) vice-president and chief financial officer Leslie Maasdorp, has bought 2% of tile manufacturer Italtile, the company said on Tuesday.
The owner of CTM and TopT brands said Yard Investment Holdings, an equity investment firm formed by Maasdorp and his business partner, Yogesh Narsing, had bought the stake for R312.2m in a black economic empowerment (BEE) transaction
The Shanghai, China-based NDB, which is also known as the Brics Development Bank, is a multilateral development bank established by the Brics states. It supports projects through loans, guarantees, equity participation and other financial instruments.
Italtile executive director for retail Brandon Wood said the empowerment deal with Yard, entered into on August 22, was in line with Italtile’s strategy of improving its BEE credentials.
Italtile said the transaction was expected to enhance Italtile’s BEE ownership credentials for at least three years.
“In terms of the BEE codes [of good practice], a three-year partnership ithe minimum period permitted, which would enable the business to secure or enjoy continuous benefits according to the ownership criteria credentials prescribed,” Wood said.
He said the company’s ambitions also included establishing a medium to long-term relationship with a BEE partner with international commercial experience relevant to the company’s business.
“This includes significant experience in the China — a market which the Group currently sources product from,” he said.
Yard implemented the deal through wholly-owned subsidiary, Yard SPV, a newly incorporated special purpose vehicle, whose purpose is to house the shares bought from Italtile, which reported a R10bn turnover in the year ended June 30 2019.
Wood said there was limited appetite for equity higher than 2%. “This transaction has taken 18 months to conclude, following extensive investigation of potential interest in the market and of prospective partners. At present in the market in SA there is limited appetite for capital investment at higher levels,” he said.
The acquisition would be funded through a combination of equity and debt. “We are not at liberty to disclose further detail,” Wood said.
Other than Maasdorp, a former MD and president of Bank of America Merrill Lynch for Southern Africa, and Narsing, Yard’s other shareholders are Badian Maasdorp and Mikhail Maasdorp.
Narsing is the former head of research at Legae Securities, a niche stock broking firm within the Wiphold group and was previously part of the private equity team at investment holding firm Brait.
According to its website, Yard has exposure in a range of sectors including listed property, IT products and services, sanitation, steel pipe manufacturing and financial services.