Is Long4Life’s quest to bulk up its own market capitalisation going to come back to haunt it? Analysts are grappling with founder Brian Joffe’s latest deal: a meaty R3.9bn acquisition of historically fast-growing, low-cost shoe chain Rage. The purchase price is close to Long4Life’s own market capitalisation of R5.3bn, and will cost Joffe a chunk of his start-up’s equity. Rage is expected to make R1.25bn in sales for the full year ended June and R263m in profit, which gives it a price-earnings multiple of 14.9. Says one analyst, who asked not to be named: "Is Rage a great business? I don’t know. What I do know is that it is a single product and single market-focused business, while for a 16 and 17 p:e, I can buy Massmart and Spar Group, which are the complete opposite — large, diversified, defensive." However, Massmart and Spar aren’t producing anything close to the growth Rage is enjoying: like-for-like sales of 16% in the past financial year, according to Long4Life, which is comple...

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