African Rainbow Capital (ARC) formally announced its plans to list some of its portfolio of assets on the Johannesburg Stock Exchange in September. The offering is expected to raise about R4 billion or approximately $307 million for the financial services and private equity investment venture, which was set up by billionaire businessman Patrice Motsepe in 2016.
ARC Investments, as the listed entity will be known, will include almost half of ARC’s financial services assets and all of the firm’s non financial services interests which include its investments in the agriculture and telecommunications sectors. ARC’s stakes in Alexander Forbes, Santa, and fledgling stock exchange A2X will be among those held by ARC Investments. The total value of the assets earmarked tagged for inclusion in the listing is put at R4.5 billion or $345 million by the firm’s investment team.
Public Investment Corporation, the manager of the South African government’s employee pension fund, asset manager Sanlam Private Wealth and GIC, Singapore’ sovereign wealth fund have already committed R2.1 billion between them to the raise. The balance of R1.9 billion will be raised via a private placement offering to a group of select investors. Proceeds of the raise will be used to pursue other investment opportunities and fund the balance of the price tag for its most significant investment to date, a 20% stake in Rain, a fixed and mobile data network provider owned by Multisource Group, which it acquired at the beginning of August.
“The universe for attractive empowerment transactions is vast and is not limited to a certain sector or size,” said Johan van der Merwe, ARC’s joint-CEO in a statement.”In order to increase the scope of our potential transactions [in diversity and size] we believe it makes sense to stretch our investment reach by accessing the capital markets. This will allow ARC to share the competitive advantage that its investment vehicle brings. The impact of empowerment is therefore enhanced by bringing together empowerment and public funding.”