African mezzazine fund manager Vantage Capital has agreed to provide US$28mn as funds to increase the management’s share in facilities management firm Servest
According to Vantage Capital, the decision to increase Servest’s management shareholding was related directly to the acquisition of Kagiso Tiso Holdings (KTH), an investment holding company.
With the acquisition, Servest has become the largest majority black-owned facilities management company in Africa, with 45,000 employees providing integrated facilities management solutions to more than 6,500 clients on 24,000 sites across nine Africa nations and the United Kingdom. Servest solutions include facilities management, remote camp management, security, parking, cleaning, hygiene, pest control services, landscaping, turf construction and maintenance, indoor plants as well as office services for corporate clients.
Vantage Capital COO Warren van der Merwe said, “We are proud to support Servest’s management team in the deepest and most cohesive share ownership structure we have seen. The Servest business is a high quality business combining strong defensive and growth characteristics and we look forward to partnering with the company as it executes an exciting growth strategy.”
According to Servest chairman Kenton Fine, the management was on the lookout for a strong funding partner to support its growth momentum. Specifically, this investment highlights the unique benefits of mezzazine funding, which allows management shareholders to use funding to increase equity participation.
This investment is Vantage Capital’s thirteenth transaction in Fund II, which is now fully invested. Vantage Capital is soon to complete fund raising for its Fund III, which is targeted to be more than US$200mn, with a 50 per cent allocation to investments outside South Africa. Addcapital Africa was the lead corporate advisor to this transaction.
