Actively mining growth – Buildmax

Brait Fund IV, Africa’s largest pool of private equity capital, continues its investment programme with the acquisition of a 24% equity stake in Buildmax.

Investment taps into strong growth industry

Brait’s investment of R332 million in JSE-listed open-cast equipment and services group, Buildmax, positions it to benefit from the strong growth prospects of contract mining services in the coal industry.

The investment by Brait Fund IV is in line with one of the Fund’s investment themes, namely exposure to infrastructure-related activities, and follows Brait’s Capital Africa Steel joint venture with JSElisted Wilson Bayley Holmes-Ovcon (“WBHO”) earlier this year.

Buildmax is a leading diversified supplier of services, equipment and materials to the mining and construction industries. The group is not highly geared and is presently in an aggressive expansion phase.

The coal industry in South Africa has visible growth prospects with local utility Eskom’s imperative to increase coal stockpiles, de-mothball old power stations and commission new power stations. Local demand for coal is therefore likely to be strong for the medium-term. Additionally, the expansion of the Richard’s Bay coal terminal will increase export capacity.

The level of general investment in coal mining in South Africa has increased substantially and a number of new coal mines have recently been opened or are in the process of being commissioned. Brait is of the view that these initiatives provide substantial underpin to a robust growth sector.

The company’s strong management, enviable operational cash flows and excellent medium-term prospects make it a very attractive investment. The acquisition satisfies Brait’s investment criteria and is the firm’s third “unique public opportunity”-style investment since its inception.

Brait’s investment strengthens the Buildmax balance sheet and introduces Brait as a strategically valuable shareholder, allowing Buildmax to pursue both organic and acquisitive growth opportunities. Brait executives will play an active role in the group alongside the leading shareholders and management executing a growth strategy in the public domain.

+27 11 507 1000 Brait is an Authorised Financial Services Provider