Alexander Forbes in talks with Motsepe’s ARC?
Financial services company Alexander Forbes is reportedly in talks to sell a stake in its AfriNet unit to African Rainbow Capital.
|||Johannesburg - Alexander Forbes, a South African financial services company, is in talks to sell a stake in its AfriNet unit to African Rainbow Capital, according to a person familiar with the matter.
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African Rainbow Capital, chaired by billionaire Patrice Motsepe, plans to use the AfriNet acquisition to expand its operations outside South Africa, the person said, asking not to be identified because talks are private.
Motsepe, 54, the richest black South African with a fortune of $1.7 billion, started African Rainbow Capital in April with access to as much as R17 billion ($1.22 billion) in capital to build a financial-services company controlled by black people and spanning everything from life insurance and healthcare to money management and banking. AfriNet offers insurance and risk management services in 30 African countries.
African Rainbow Capital co-Chief Executive Officer Johan van Zyl declined to comment. Lynn Stevens, a spokeswoman for Alexander Forbes, declined to comment.
Profit growth
Companies in South Africa have sold stakes to black investors to compensate for discrimination under apartheid, which ended in 1994, with the economy still controlled by the white minority. Alexander Forbes said in March it started talks with a black-owned partner about an investment in the group’s African subsidiaries and said on July 25 the talks are still ongoing.
In the fiscal year ended March, AfriNet’s profit from operations grew 23 percent to R74 million and its assets increased by more than 9 percent to R4.33 billion, according to Alexander Forbes’ annual report. AfriNet’s contribution to group profit has risen to 6.1 percent by March from 4.7 percent two years ago.
Alexander Forbes, which had an initial public offering in 2014 after its private equity owners exited the investment, is 33 percent held by Marsh & McLennan Cos’s Mercer unit, according to data compiled by Bloomberg.
Shares in Alexander Forbes have gained 9.6 percent since the start of the year, giving the company a market value of R8.7 billion.
BLOOMBERG