Black South African Firms Merge to Form Corporate Giant

Kagiso Trust Investments and the Tiso Group this month completed their merger to form a black-owned South African investment company of scale, boasting a diverse base of quality assets with a gross value in excess of R13-billion.

The merged company, Kagiso Tiso Holdings (KTH), will be led by a “strong, proven and predominantly black management team with a depth of skills and experience,” the companies said in a statement.

“It will have an enhanced balance sheet strength, portfolio diversification and stronger cash-flow profile, creating more opportunities for growth.”

KTH chief executive Kgomotso Matseke, in a statement issued earlier this month, said the transaction was “about creating the scale to give us access to larger and more attractive transactions … With a bigger, more robust balance sheet and a broader and deeper pool of management experience, we are better positioned to pursue material interests in the most attractive assets.”

Mutual aspiration

Matseke will lead the KTH management team along with deputy CEO Vuyisa Nkonyeni, financial director Frencel Gillion, chief investment officer Jacob Hinson, and Afzal Patel. Tiso Group founders Nkululeko Sowazi and David Adomakoh will be non-executive directors.

“This merger by two black-owned companies, driven by a mutual aspiration to build a noteworthy business platform that is reflective of the new South Africa, is a great milestone for the country’s economic transformation project,” said Sowazi. “It represents a validation and maturation of black economic empowerment and the creation of an enterprise that will deliver both social and shareholder value.”

A merger committee that will oversee full implementation of the merger has been established for an interim period and is chaired by Sowazi. Sowazi will also co-chair the board of directors with Nthobokae Angel.

“We are very excited by the promise of having engineered a company that will be a leader in effective social investment,” said Angel. “The fact that two public benefit trusts are jointly the largest shareholder in KTH means that its commercial success directly impacts socio-economic development.”

The merger has fulfilled all the legal and regulatory requirements, including approval by the Competition Commission and Competition Tribunal.