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Cape Town - A consortium consisting of black-owned and managed Medu Capital and J&J Private Equity Fund has purchased a 7.5% equity interest in Pepkor for a cash consideration of R208m, Pepkor announced on Monday.
Pepkor is one of South Africa''s largest retailers.
It was de-listed from the JSE Securities Exchange SA in February 2004, following its buyout by Brait and Old Mutual for R2.6bn.
The consortium has financed the purchase from existing private equity funds and other third party funds.
At the time of Pepkor's buyout, the ability to make an equity stake available for black economic empowerment (BEE) investors was cited as one of the reasons for supporting the transaction.
Old Mutual and Brait undertook to make available 7.5% of the equity in Pepkor for empowerment investors.
Pepkor chairperson Dr Christo Wiese said that the board of Pepkor went through a rigorous process to select the appropriate BEE consortium.
After a six-month process, Pepkor had concluded a transaction with BEE partners that could add value to the business of Pepkor.
He added that Pepkor was pleased with the commitment of the consortium to broad-based BEE.
"We chose this consortium because they committed to share their economic interests with the Pepkor Workers' Trust. In this manner, our loyal employees will also benefit from this transaction."
Medu Capital, founded by Nhlanganiso Mkwanazi and Ernest January, has R250m of private equity capital and invests between R30m and R70m in established businesses. To date, Medu Capital has made investments in Ampaglas, Capital Outsourcing Group, VitalAire and Zest.
Medu executive director Ernest January said that Pepkor, with a turnover of over R8bn and 17 000 staff, represented an attractive investment opportunity for the consortium.
J&J Group is a broad based and diversified investment and management company led by Jay Naidoo and Jayendra Naidoo with strategic interests in IT, financial services and industrials.
J&J Private Equity was established with a R300m funding commitment from Old Mutual.
This investment in Pepkor represents the first major investment by the J&J Private Equity Fund.
Jayendra Naidoo, CEO of the J&J Group said: "As medium- to long-term shareholders in Pepkor, the consortium is well positioned to play a meaningful role in helping Pepkor grow its business and in assisting the transformation initiatives that have been in existence in the group.
"Black economic empowerment is more than just having black shareholders. We will also be able to assist in the current employment equity strategy, human resource development and preferential procurement policies."
January and Jayendra Naidoo will be appointed to the board of Pepkor, giving the consortium the platform from which to support Pepkor with its broader growth objectives and BEE initiatives.