New transformation champion is born as Kagiso Trust Investments and Tiso Group conclude merger

06 July 2011

Kagiso Trust Investments and Tiso Group are pleased to announce that (effective 1 July, 2011) they have completed their merger to form a leading, black-owned South African investment company of scale. The merged company, called Kagiso Tiso Holdings (KTH), will be led by a strong, proven, predominantly black management team with a depth of skills and experience, boasting a strong brand and a complementary and diverse base of quality assets with a gross value in excess of R13bn. KTH's enhanced balance sheet strength, portfolio diversification and stronger cash-flow profile will create more opportunities for growth.

KTH CEO Kgomotso Matseke said "The rationale for the transaction is about creating the scale to give us access to larger and more attractive transactions. With a bigger, more robust balance sheet and a broader and deeper pool of management experience, we are better positioned to pursue material interests in the most attractive assets."

Matseke will lead the KTH management team along with executive directors; Vuyisa Nkonyeni, deputy CEO, Frencel Gillion, financial director, Jacob Hinson, chief investment officer (with effect from beginning of September) and Afzal Patel. Tiso Group founders Nkululeko Sowazi and David Adomakoh will be non-executive directors.

A merger committee that will oversee full implementation of the merger has been established for an interim period and is chaired by Nkululeko Sowazi. Sowazi will also co-chair the board of directors with Nthobokae Angel.

 Sowazi said: "This merger by two black-owned companies, driven by a mutual aspiration to build a noteworthy business platform that is reflective of the new South Africa, is a great milestone for the country's economic transformation project. It represents a validation and maturation of black economic empowerment and the creation of an enterprise that will deliver both social and shareholder value."

Co-chair Angel said "We are very excited by the promise of having engineered a company that will be a leader in effective social investment. The fact that two public benefit trusts are jointly the largest shareholder in KTH means that its commercial success directly impacts socio-economic development."

The merger has fulfilled all the legal and regulatory requirements, including gaining Competition Commission and Competition Tribunal permission.

Nedbank Capital acted as the sole investment bank to the parties to the merger.