The Aureos Southern Africa Fund LLC (ASAF) has sold its stake in South African brick and clinker aggregate manufacturing group, SA Block (Pty) Ltd.
SA Block manufactures bricks and clinker aggregate from clinker, the ash by-product produced when coal is burnt for electricity, thereby recycling what would otherwise be environmental waste. The clinker supplied by SA Block has unique advantages to manufacturers of concrete products.
ASAF is managed by Aureos Southern Africa Managers Ltd, a subsidiary of Aureos Capital Limited, a leading private equity fund management company specialising in investing in small and mid-cap companies in global growth markets. ASAF, a US$50 million fund, was established in 2003 as one of three regional funds set up by Aureos to invest in Africa. ASAF is fully invested and has successfully exited or partially exited from 5 of 10 of its investees. During 2008, Aureos raised the US$381 million Aureos Africa Fund, for investments across the continent, as a successor Fund to ASAF and Aureos East and West Africa regional funds
ASAF’s exit forms part of the 100 % sale of SA Block to Afrimat Ltd, a leading black empowered open pit mining company listed on the Main Board of the Johannesburg Stock Exchange.
ASAF invested in SA Block in February 2006. SA Block has since achieved consistent growth, carving itself a unique position in the market as a leading brick and clinker manufacturer in Gauteng.
Ron den Besten (pictured), Managing Partner of Aureos South Africa Advisers, says: “This exit marks the culmination of a successful investment for ASAF.”
“We initially selected SA Block as a secure growth company in an industry that would benefit from macro-economic drivers. It boasted an established customer base, strong market presence and great access to high quality raw materials, as well as a solid operational track record and experienced and dedicated management team.
“The domestic market for bricks had also been steadily increasing for a number of years, while the construction sector’s proportionate contribution to GDP was poised to, and in-fact did, increase over the investment horizon.
“We worked closely with the management team of SA Block, identifying and assisting in negotiations for opportunities in line with their growth strategies along the way. Through our combined local knowledge and international network, the company was able to enter into discussions to explore potential diversification of SA Block’s operations through the adoption of new raw materials.”
“After six productive years of working closely with SA Block, we identified the opportunity to make a profitable exit and we now leave the company in the good hands of its acquirer Afrimat, The acquisition will enable Afrimat to gain a foothold in the clinker supply market and concrete manufacturing industry in line with their diversification strategy.”