New Delhi, March 9 -- RMB Corvest, the private equity arm of the South African financial services group FirstRand Group, and Agile Capital, a Johannesburg-headquartered mid-market PE firm, have sold their stake in a portfolio company that they backed more than eight years ago as a part of a management-led buyout (MBO) from its founders.
The PE firms have exited their investment in Feedem Group, one of the largest contract catering businesses in South Africa, in a strategic buyout to a facilities services company Empact Group that offers catering, cleaning and integrated facilities management solutions. Johannesburg-based Feedem Group provides catering and facilities services, primarily serving corporates, institutions and industrial clients.
The two investors did not immediately respond to VCCircle's queries seeking additional details.
The transaction has been approved by the Competition Tribunal of South Africa.
"Feedem has been an outstanding investment for RMB Corvest and a clear example of what can be achieved with strong management, strategic focus and operational discipline," said Genevieve Alberts, director at RMB Corvest, in a statement.
Feedem, set up in 1975, delivers food and integrated support services to corporates, healthcare institutions, schools and industrial clients, operating at more than 1,000 sites nationwide.
RMB Corvest and Agile Capital, which formerly was known as Zico Capital, had invested in Feedem in May 2017, structured as an MBO of Feedem from its founders. While RMB invested from its balance sheet, Agile Capital invested through Zico Capital Fund II, a $43 million vehicle that it raised in 2014.
"At the time of acquisition, Feedem was a mid-tier catering business with a strong footprint in the Western Cape retirement sector. Since then, the business has undergone a significant transformation, emerging as one of the largest contract caterers in South Africa," RMB Corvest's statement said.
Feedem has grown through both organic and inorganic means, and diversified into specialised cleaning and pest control services and expanded into higher-margin institutional catering contracts.
Empact Group, also based in Johannesburg, South Africa, is a multi-service outsourcing provider, offering catering, cleaning, hygiene and facilities management services to organisations in sectors including healthcare, education, industrial, retail, commercial and corporate environments. It is owned by Thebe Investment Corporation, a prominent South African investment group.
Published by HT Digital Content Services with permission from VC Circle.