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Bidvest makes another acquisition in quest to expand

Jan 11 2018 16:18
Fin24 and Bloomberg

Cape Town - Bidvest Financial Services announced on Thursday that it has acquired Cannon Asset Managers, a South African-based asset management firm specialising in investments that span domestic and global asset classes.

According to Bidvest, which consists of Bidvest Bank, the Bidvest Insurance Group and Master Currency Foreign Exchange, the acquisition forms part of its continued efforts to expand its financial service offering.

Cannon will operate as a separate business in the Bidvest Financial Services division and work closely with Bidvest Bank and the Bidvest Insurance Group.

“Our acquisition of Cannon is a key building block in the expansion of our financial services business,” explains Japie van Niekerk, MD of Bidvest Financial Services and Bidvest Bank.

“We are delighted to be able to attract a business with the track record and reputation that Cannon has, and we see a good strategic fit in combining our businesses.”

Diversification

For Bidvest Financial Services, the acquisition of Cannon further diversifies its customer value proposition from Bidvest Bank’s traditional fleet and forex operation and expands its financial services offering to include investment management.

“Cannon is recognised for a committed investment philosophy and disciplined process. Over time, this has facilitated the building of a solid track record – ranging from wealth that needs to be prudently managed and generate a monthly income through to patient capital that has a long-term growth objective,” Dr Adrian Saville, chief executive of Cannon, said in a statement.

“With Cannon’s focus and track record in investment management, we can fully harness the investment capabilities offered by both Bidvest Bank and the Bidvest Insurance Group.”

Established in 1998 by Saville, Cannon investments by the identification and purchase of assets trading at attractive valuations relative to their intrinsic or underlying value.

Citadel Holdings acquired a controlling stake in Cannon in April 2015. According to the statement both entities agreed that the time had come for them to concentrate more effectively on their respective areas of focus.

“This decision will allow Cannon and Citadel to focus more specifically on their key competencies,” confirmed Andrew Möller, CEO of the Citadel Group.

George Herman has assumed the role of chief investment officer at Citadel and Maarten Ackerman the role of Citadel’s chief economist and advisory partner. Saville will continue to serve as an independent strategist for Citadel Investment Services, while Cannon will retain the mandates for the funds that the entity currently manages for Citadel.

According to Van Niekerk, both Bidvest Financial Sevices and Cannon share a strong entrepreneurial culture.

The acquisition of Cannon comes not long after the announcements of Bidvest Bank’s acquisition of First Data Holding’s (a South African merchant services operation) and Bidvest Financial Services’ acquisition of majority shareholding in FinGlobal.

According to the statement, these two acquisitions also support Bidvest Bank’s diversification strategy into business banking, including asset-based finance, personal banking and fleet management.

Steady growth over the last 10 years, combined with its prudent lending philosophy, saw Moody’s Investor Services upgrade Bidvest Bank’s long-term national scale rating to Aa2 from A1, an increase of two notches, in 2017.

Bloomberg reported that Bidvest Financial Services is funding the deal with its own cash reserves and could ask its parent for help in securing future acquisitions, according to Van Niekerk.

Bloomberg also said the four Cannon funds with at least four years history all underperformed their benchmarks last year, according to its website. By mid-morning Bidvest's share price was up 0.02% at R208.55.

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