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Aquila banking on listing to put money in the kitty
The flotation will provide funds for expansion and give investors another nibble of a private equity fund, writes JABULANI SIKHAKHANE
Co-founder and managing director Peter Papadimitropoulos says Aquila is raising R10-million through a private placement to institutions and business associates. A further R10-million will be raised through a public offer. Shares are being offered at 200c each. Papadimitropoulos - popularly known as Papas - says the additional funds will come in handy given Aquila's deal flow. Aquila aims to buy significant minority shareholdings of 20% to 40% in companies with operating profit of at least R5-million or which are capable of achieving such profitability in the medium term. The fund will focus on food and non-retail sectors. Papas says all retail opportunities will be slotted into Reggies, which still offers a lot of internal growth. Strategic acquisitions will also be looked at. On the food side, Papas has good links with international food groups like French multinational Danone, on whose behalf he is an alternate director on the board of local food group Clover Holdings. He also initiated the recently announced joint venture between the SA Dried Fruit Board's unit, Wellingtons, and US-based food multinational Heinz. Aquila, which started life in 1995 as KidzCo, a company used for the management buyout at Reggies, is backed by Martin Venture Capital (MVC) which consists of private financial investors introduced by Fleming Martin. MVC backed the Reggies management when they bought out Waltons' 60% stake in the toy retailer for R10.5-million. Today, Reggies has a market value of about R300-million. Since the management buyout in 1995, Reggies has bought audiovisual retailer Hi-Fi Corporation and Appliance City, a retailer of household appliances. The latter was bought for R46-million from September 1 this year. Aquila also owns a 40% stake in Durban-based Nature Source, a niche cereal breakfast manufacturer with annual sales of R45-million. Nature Source, bought with effect from March this year, could easily double its turnover in two to three years, he says. Given the number of acquisition opportunities available, Papas says Aquila will consider a listing of Nature Source in its current form or after merging it into one or more food companies. Papas, a former investment banker at Fleming Martin and ING Barings, says the private equity market is set to grow, fuelled by the deregulation of markets, unbundling, relaxation of exchange controls and black empowerment.
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