|Traded as||JSE: BAT|
|Headquarters||San Gwann, Malta|
Brait SE is an investment holding company focused on driving sustainable long-term growth and value creation in its investment portfolio of sizeable unlisted businesses operating in the broad consumer sector. Brait’s shares are listed on the EURO MTF market of the Luxembourg Stock Exchange and also on the JSE.
Achieve superior long-term capital appreciation through majority or significant minority stakes in investments across a portfolio of primarily unlisted companies, while raising capital in the most efficient manner
• Investment size that ‘moves the dial’
• Solid track record demonstrating strong growth in earnings, good margins and high cash flow conversion
• Strong, aligned and experienced management team
• Market leader in chosen segments
• Well developed platform in local market with ability to move geographically into high growth territories
• Clear coherent strategy that is flexible in order to be sustainable over the long term
• Sensible acquisition multiple
• Deep understanding of customers / clients
• Relevant products
• Target a portfolio of 5 - 6 large quality assets
• Whilst opportunistic on exit, ability to hold investments for long timeframes (open ended)
• Ability to execute transactions quickly
• Disclosure of valuation metrics and summarised audited financial statements for all significant investments to enable investors to formulate their own valuations
• Quarterly NAV reporting
• Interim and year-end results presentations, with portfolio company management present
1999 Listing of Brait S.A.
The decision was made to list the business by merging with an emerging market investment banking group, Capital Alliance Bank and an investment holding company Tolux SA, primarily listed in Luxembourg and secondarily listed in Johannesburg. The merged entity’s name was changed from Tolux SA to Brait Societe Anonyme in August 1998. The name derived from an uncut diamond – a brait – which, in the hands of a master craftsman, can be turned into something of considerable value and beauty.
Private Equity Funds Raised
|Brait I||1991||1st closed-end 3rd party funded private equity (PE) fund raised in RSA|
|Brait II||1995||1st PE fund in RSA to have raised international capital (mainly N. America)|
|Brait III||1999||$409m capital raised was the largest at the time on African continent|
|Brait IV||2006||$880m capital raised was the largest at the time on the African continent|
2011-2012 Transition to an Investment Holding Company
Transition to new Brait business model: The decision was taken for a fundamental change in the Company’s business model from a traditional private equity fund manager to an investment holding company. A total of R8.6 billion capital was raised on 4 July 2011 – considered the largest capital raise on the African continent at the time – comprising R6.4 billion ordinary shares capital through Rights Offer and Private Placement and a R2.2 billion long-term debt facility.
Initial anchor investments – Pepkor and Premier: Brait invested R5.4 billion of the capital it raised on 4 July 2011 into acquiring
• 37% of Pepkor for R4.1 billion; and
• 49.9% of Premier for R1.1 billion, which included shareholder loans of R0.2 billion.
Third investment – Iceland Foods: Invested R1 billion (GBP 81 million) in acquiring an 18.7% stake in Iceland Foods on 9 March 2012.
Organisational and internal restructure: The Company merged with a Malta subsidiary and became a European Company on 24 November 2011, transferring its registered office to Malta and changing its name to Brait SE. The Board was revised to exclusively non-executive directors that oversee, inter alia, the Group investment management function. NAV growth is the key performance metric for the Group going forward.
2013-2014 Investment Holding Company
Premier acquisitions: In line with its strategy of targeting acquisitions in a wide range of new food and FMCG categories, and expanding its geographic footprint, Premier acquired Premier Swazi Bakeries; Manhattan and Super C; Star Bakeries; Lil-lets and Ngwane Mills. These acquisitions were funded by way of shareholder loans from Brait.
Issue of R2 Billion preference shares: Brait successfully placed R2 billion in cumulative, nonparticipating preference shares, with R1.5 billion placed in August 2012 and the remaining R0.5 billion placed in June 2013 at the R100 per share par value. Proceeds raised were applied to repaying borrowings. The preference share issue strengthened the Group’s balance sheet and reduced the Weighted Average Cost of Capital (WACC).
R1 billion loan receivable refinance: The Group used proceeds from this refinance in March 2014 to reduce existing borrowings.
Iceland: In July 2014, Iceland refinanced its entire debt via a £950 million High Yield Bond (HYB) at a blended rate of 5.825%. This represented the largest GBP HYB raised during 2014
Pepkor realisation: Brait realised its 37% interest in Pepkor receiving a total consideration of R30.010 billion on 30 March 2015, comprising cash of R15.086 billion and 200 million Steinhoff shares valued at R14.924 billion. Steinhoff provided Brait a guarantee to 30 March 2016 of a minimum price of R57 for these 200 million shares.
Virgin Active acquisition: Brait announced on 16 April 2015 the acquisition of c.80% of Virgin Active, a leading international health club operator, for c.£682 million. The acquisition price will be funded from the cash proceeds received from the Pepkor realisation. As at date of signing Brait’s FY2015 Annual Report, this acquisition remains subject to approval by the South African and Namibian competition authorities.
New Look acquisition: Brait announced on 15 May 2015 the acquisition of c.90% of New Look, a leading fast fashion multichannel retailer operating in the value segment of the UK clothing and footwear market with a growing international presence. The acquisition cost of c.GBP780 million will be funded using facilities and cash on hand. The completion date for this acquisition is expected to be 25 June 2015.
New Look raised a £1.2 billion HYB on 12 June 2015 with proceeds used to refinance its existing debt resulting in average cost reducing (pre-FX hedging) from 9.42% to 6.25%. This represents the largest ever HYB for an apparel retailer in Europe.
Premier acquisitions: Premier acquired Mr Bread Milling; La Femme and CIM. These were funded by way of shareholder loans from Brait.