South African M&A Analysis Q1 2023
Unlock the Stock: Afrimat and Spear REIT
Afrimat’s track record is spectacular. Spear REIT is a highly respected property fund. On Unlock the Stock, you can learn about both companies.
RCL is far more than just a chicken business
RCL is far more than just a chicken business these days, which isn’t a bad thing.
Bidvest: strong trading profit growth in every division
Bidvest closed 3.8% higher after releasing results for the six months to December 2021.
Liberty Two Degrees: reversions continue to bite
Liberty Two Degrees holds stakes in some of the most iconic properties in the country
Alviva: 20% revenue growth excl. Tarsus
After teasing the market with a trading statement, Alviva has now released all the details of the interim results for the six months ended December 2021.
PSG Group and the Great Value Unlock
This is one of the biggest news stories on the JSE that we’ve seen in a while
JSE Limited: a cash cow in a shrinking field
You may not be aware of this, but the JSE Limited is listed on the JSE. You’re right in thinking that this sounds like the financial version of the movie Inception
Capital Appreciation on the deal train
The company has announced the acquisitions of three technology companies in South Africa and a 20% stake in a company in the Netherlands.
Woolworths won’t miss 2021
as released results for the 26 weeks to 26 December 2021. The share price rallied 6% despite a fair share of negative commentary on Twitter.
Cashbuild’s negative sales momentum continues
Cashbuild released its interim results for the six months ended 26 December 2021
Challenging conditions – both of a global nature and those of SA’s own making – have severely curtailed the number of mergers and acquisitions recorded by DealMakers for the first three months of this year. However, though there is still much uncertainty (with rising interest rates and the risk of a total grid collapse a very real possibility), M&A activity has gained some momentum since the quarter close, where companies carrying strong balance sheets and having the ability to move quickly have taken advantage of opportunities and distressed situations.
Deal activity by corporates listed on one of the local exchanges declined 61% on levels reported in Q1 2022, with the aggregate value of deals at R31,72bn from 59 deals (2022: 94 deals valued at R81,82bn). The largest deal by value for the quarter, and the only BEE deal for the period, was Absa’s disposal of a 7% stake valued at R11,6bn.
The most active sectors were Real Estate (30% of the quarter’s deals) followed by the tech and energy sectors. Deal size fell typically in the R50m to R200m bracket reflecting c.30% of deals recorded for the period. SA-domiciled companies were involved in 18 cross border transactions, notably in Australia (5) and Europe (5), followed by Africa (4).
Share issues and repurchases characterised the general corporate finance activity for the quarter, with R212,59bn raised from the issue of shares and R109,54bn the value of shares repurchased. The repurchase programmes of Prosus, Naspers and Glencore account for most of this value, while the aggregate value of Richemont’s issue of A shares (conversion of depositary receipts) was R196,56bn.
In March, the International Monetary Fund cut its growth forecast for SA to just 0.1% for 2023, warning that the country risked economic stagnation unless it acted with urgency. The solution for economic reforms to tackle fiscal and structural challenges, and so boost growth, is to involve business. The longer it takes for this to be realised, the greater the risk of further deterioration in business and consumer confidence and levels of fixed investment.
DealMakers Q1 League Table – M&A activity by the top South African advisory firms (in relation to exchange-listed companies).
DealMakers Q1 League Table – General Corporate Finance activity by the top South African advisory firms (in relation to exchange-listed companies).
The latest magazine can be accessed as a free-to-read publication at www.dealmakersdigital.co.za
DealMakers is SA’s M&A publication.
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