Ethos Private Equity invests in Idwala Industrial Holdings, RMB exit

Ethos Private Equity has led a joint bid culminating in Ethos and Old Mutual Private Equity investing in Idwala Industrial Holdings Ltd. Tiso Group and Idwala management will remain invested in Idwala alongside Ethos and Old Mutual, while RMB Ventures is exiting their four year investment. The transaction facilitates Tiso realising value for its original investment, whilst remaining the largest individual shareholder with a 30% holding in Idwala. Furthermore, Tiso’s Nkululeko Sowazi continues as the Chairman of the Idwala Board of Directors.

The size of the transaction has not been disclosed.

Idwala is a vertically integrated supplier of processed lime, calcium carbonate and other industrial minerals. Its two major operations are its Lime and Carbonates divisions. The Lime operation is based in the Northern Cape producing burnt and hydrated lime for the gold, base metals, chemical and pulp and other industries. The Carbonates operation is based in Port Shepstone, producing a fine white calcium carbonate powder used as a filler and extender in the production of paper, plastic, paint and numerous other products.

James Welsh and Wayne Brown have been appointed Managing Director and Deputy Managing Director respectively at Idwala following the retirement of the former leadership at the conclusion of the transaction.

Ethos has concluded the investment in its current Fund, Ethos Fund V, while Old Mutual Private Equity has made the investment through its current fund, Old Mutual Private Equity Fund II. Nedbank Capital arranged and underwrote the funding package required to enable the transaction and Nedbank Capital along with Rand Merchant Bank will continue to be the main funders to Idwala together with Mezzanine Partners.

Stuart MacKenzie, Partner at Ethos said: “Idwala is an exciting addition to the Fund V portfolio. We are delighted to have invested behind an excellent management team and top-tier empowerment group Tiso. Ethos looks forward to partnering them through the next stage of the company’s development.”

“The company has well established state of the art production facilities and access to very substantial deposits of limestone which are crucial to the mining and energy sectors, and play a key role in the fight against pollution,” continued Ethos Partner, Anthonie de Beer,

Jacci Myburgh, Portfolio Manager at Old Mutual Private Equity, commented: “Idwala has a variety of attractive investment characteristics, including a prominent market position and a strong management team. We regard this as a high quality investment that will add resilient performance to our portfolio, and look forward to a successful partnership with our fellow investors and management in the years ahead.”

David Adomakoh, Group Managing Director of Tiso said: “This is a great transaction for us. It was important for us to remain a key shareholder and Idwala’s relevance to our corporate strategy justifies the significant equity investment made by Tiso. Idwala is an outstanding company with a great management team and excellent prospects.”

James Welsh, Group Managing Director of Idwala said: “We welcome Ethos and Old Mutual as investors in the business. Tiso remains as a significant, active shareholder demonstrating their confidence in the business and its future growth prospects. We look forward to our investors playing an active role in helping us grow the business in a sustainable way.”

As mandated lead arranger and underwriter, Mark Sardi, Joint Head Investment Banking Nedbank Capital, commented: “Nedbank Capital is proud to continue it’s longstanding relationship with Idwala. This landmark acquisition transaction was achieved in the face of extremely difficult economic conditions. The transaction also presented a number of unique challenges and the conclusion of the deal is a commendable achievement to all involved.”

Simon Murray, Transactor at RMB Ventures “Idwala has been a great investment for us over the past four years. We are proud to have been shareholders alongside Idwala’s world class management team and wish new management, Tiso and new shareholders every success in the years ahead”.

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Ethos Private Equity invests in Idwala Industrial Holdings, RMB exit

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