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DealMakers - 2023 Annual

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Deal of the Year

Alliance Medical Group – set to transform horizons

After receiving several unsolicited proposals from third parties to acquire its European diagnostic and molecular imaging business, Life Healthcare announced the disposal of Alliance Medical Group (AMG) just seven years after its acquisition from funds managed by M&G Investments and Talbot Hughes McKillop(now known as THM Partners). The deal, valued atc.R21,3bn (including debt) will unlock significant value for shareholders and position AMG to continue supporting Europe’s evolving healthcare needs.


AMG operates 233 sites and delivers over 1,1 million scans per year across the UK and 10 other European countries. It isa trusted partner to a number of public health authorities across the UK and Europe, including the NHS (UK and Ireland), ASL (Italy) and HSE (Ireland). AMG also provides services to private paying patients. The Group is comprised of the following operational sub-divisions: Diagnostic Imaging services, Molecular Imaging services, Radio pharmacy services and Other services, such as ultrasound scans and x-rays. Life Modular Imaging will remain with Life Healthcare post the transaction – a move requiring a complex Group restructure.


Alliance Medical Group has significant capex needs going forward. From a shareholder’s perspective, the transaction de-risks the delivery of the AMG business plan. The funds managed by iCON Infrastructure are active investors in European healthcare infrastructure and are well placed to support and develop AMG’s vertical, integrated pan-European imaging platform. 



The transaction will result in improved return on capital metrics, as well as improving overall cash conversion, resulting in a material reduction in the Group’s gearing to approximately one times net debt to normalised EBITDA. A resilient, flexible balance sheet with strong cash generation ability will provide headroom to invest in growth and enable Life Healthcare tore turn R8.4bn to shareholders, the majority of which will be via a special dividend, and to a lesser extent via share buybacks.

The deal entailed several challenges, in light of its cross-border elements and regulatory hurdles. Regulatory clearances are needed across multiple jurisdictions, including Ireland, Austria, Germany and Italy.

Local Advisers

Goldman Sachs, Barclays Bank, Rand Merchant Bank, Standard Bank, Werksmans, Webber Wentzel, Deloitte and BDO.

Comment from the Independent Panel: Life Healthcare effectively managed a multijurisdictional process to unlock value for its shareholders, while at the same time,  strengthening its balance sheet and allowing for further growth.


Life Healthcare acquired 94% of AMG in 2016,for an equity value of c.R10bn. In the past six years, its revenue has grown by 63%,measured in GBP. In the financial year ending September 2022, it contributed27.2% of Life Healthcare’s revenue. The purchase price represents a significant premium realised to the implied value of AMG, based on a sum of the parts, representing 47.8% of the Group’s market capitalisation (pre-February cautionary).


iCON – an exclusive investment adviser to infrastructure funds with cumulative commitments in excess of $8bn – is a long-term investor with an extensive track record of supporting market-leading businesses to enablegrowth and sustainability.

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Pick of the best in no particular order

Energising Africa

Following a competitive process by Malaysia’s state-owned oil and gas company, Petronas, to find a suitable buyer for its 74% shareholding in African-based energy group Engen, Vivo Energy emerged as the
successful bidder. The transaction – the value of which is not in the public domain, but is speculated to be in the region of US$2bn – is one of the largest downstream investments in Africa and, following the deal, will result in the group having more than 3,900 service stations in 27 African countries.

As Petronas’ sole downstream African asset, the proposed sale is in line with its asset rationalisation strategy and aligns with its growth ambitions in the changing industry environment and accelerated energy transition landscape. Engen’s primary business is the marketing of petroleum, lubricants and functional fluids, chemicals and retail convenience services. It currently operates a large retail footprint with c.1,300 services stations across seven countries in sub-Saharan Africa. Engen also exports its products to various other territories.

Local Advisers

Rothschild & Co, Standard Bank, Citigroup Global Markets, Morgan Stanley, Rand Merchant Bank, ENS, Werksmans, Webber Wentzel and EY

Unlocking potential for growth


In a deal valued at R1,97bn, and announced with the support of 64.7% of minority shareholders, the buyout of minorities brought Liberty Two Degrees (L2D) back into the group after almost seven years of a separate listing on the Main Board of the JSE. As its major shareholder, Liberty – which itself is owned by JSE-listed banking and financial services giant, Standard Bank –held a c.61% stake, making L2D one of the less liquid listed property stocks.

Vivo Energy is a major pan-African retailer and distributor of fuels and lubricants to retail and commercial customers, with over 2,600 service stations across 23 African countries, using the Engen and Shell brands. Four years ago, Vivo Energy acquired the Engen business in nine African markets, and the completion of this transaction reunites the Engen brand across Africa. The latest acquisition represents a step change in Vivo’s growth and speaks to a significant commitment to the South African market, whilst enhancing Vivo Energy’s portfolio in other important markets.

Phembani, Engen’s long-term (since 1999) and second largest (26%) shareholder will
remain invested as a 21% shareholder in the company – the 26% stake being structured as a re investment by the Phembani Group into the South African operations of Engen, as well as the
establishment of an ESOP.

The transaction required numerousregulatory approvals in various African jurisdictions, as well as approval from competition authorities in South Africa, Botswana, Namibia, Mauritius and COMESA. The Competition Tribunal in South Africa has approved the transaction, but with conditions, including a directive that it must  invest a set amount in capital investments and production commitments over a period of five years.

The deterioration in the value of the listed property sector since 2018,due to the macroeconomic environment, was exacerbated by the onset of the COVID-19 pandemic and the illiquidity of the stock due to the limited free float.

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Comment from the Independent Panel: This transaction required careful navigation of the
regulatory and legal complexities of a multijurisdictional transaction of this nature and size.


The offer of R5,55 per share represented a premium of 46.4% to the 30-day volume-weighted average price at the time of announcement, giving investors a favourable  exit. In addition, shareholders also received an interim dividend of 18,77 cents and a ‘clean-out’ distribution of 8,42 cents. The property REIT owns around 25% of a portfolio of landmark retail and hospitality assets in SA and has stakes in 15 properties across the country, with a value ofR8,2bn. This translates toR7,51 per share (the net asset value per share at the end of December 2022), which is more than 35%higher than the offer price, translating into a discount despite the premium offered. This reflects management’s long-term view on a turnaround in the sector as interest rates ease in the future.


With most of South Africa’s property companies, which operate as Real Estate Investment Trusts (REITs), trading far below the value of their assets, sector consolidation, buy-outs and de-listings have become a trend, so the decision to buy-out L2D minorities was based on several factors.

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On the buyout of minorities, Liberty CEO Yuresh Maharaj said that the group expects the transaction to facilitate the consolidation of its high-quality property assets and enhance the options to unlock the full potential of the assets, while at the same time placing L2D in a stronger position to achieve scale and create additional value. The company’s listing on the JSE terminated on14 November 2023.

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Yuresh Maharaj

Local Advisers

Rand Merchant Bank, Java Capital, Standard Bank, Werksmans, Webber Wentzel and Mazars.

Comment from the Independent Panel: A well supported transaction, which balanced the interests of minority shareholders, its co-owners in certain of its properties, Liberty, The Standard Bank Group and its staff.

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Sun International takes a gamble on Peermont


Over the past six years, Sun International has shed its interests in Africa and Latin America as it redirects attention closer to home. The R3,2bn equity acquisition of Peermont represents a unique opportunity to acquire a group of gaming and hospitality assets of significant scale and quality, which is aligned with Sun International’s growth strategy.

The acquisition of Peermont by Sun International was previously attempted in 2015 but was not recommended for approval by the Competition Authorities, resulting in the termination of discussions.

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Announced in December, Sun International will fund the acquisition entirely through debt, based on an enterprise value of R7,3bn and an EV/EBITDA multiple of 5.76x. This will take Sun International’s gearing level to 2.6x, with a plan to reduce this to below 2.0x within24 to 36 months. R3,2bn will need to be paid to Peermont shareholders for their equity, with that amount being funded by new debt. Sun International will also assume the debt that stood at R4bn at the end of June, which would increase its SA debt levels to over R13bn.

Founded in 1995, Peermont brings 11 properties, located across South Africa and Botswana, including flagship Emperors Palace, and online betting platform PalaceBet, to the party. According to Sun International, Peermont has also developed an excellent track record in the design, development, management, ownership and operation of multifaceted integrated resorts, including hotels, casinos, convention centres, retail centres, health spas, restaurants, bars and other sport and entertainment facilities. The transaction will seethe ownership of this highly generative portfolio of assets transfer from an international asset manager into the hands of Sun International’s local shareholder base. Valued at R10,5bn on the JSE, Sun International operates four resorts and hotels in SA, as well as operating nine urban casinos, with at least one in every province. It also has an online offering, SunBet.


The strategic rationale for the acquisition is multifaceted:
• Enhanced scale and market share: the addition of Peermont’s properties solidifies Sun International’s position as a leading player in the South African gaming market.
• Omnichannel expansion: leveraging Peermont’s infrastructure, Sun International can seamlessly expand its online gaming and sports betting reach, creating a unified and comprehensive customer experience.
• Cost optimisation and synergies: combining operations presents opportunities for streamlining processes, optimising resource allocation, and achieving substantial cost savings.
• Enhanced cash flow and value creation: The combined entity is expected to generate robust cash flows, leading to improved profitability and enhanced shareholder value creation.

The transaction is expected to combine the strong management and staff compliments of both parties and provide further opportunities for growth and development across the group’s operations. The deal provides Sun International with an opportunity to build scale and acquire a world class and highly cash-generative business. The transaction is expected to increase headline earnings per share, creating an initial value accretion for Sun International shareholders. As the combined business de-gears, the effect on shareholder returns will be significant and should result in both equity growth and increased dividend flow. For Peermont shareholders, the deal provides an opportunity to achieve meaningful liquidity and to join with a respected and successful listed entity. As a combined grouping, it is likely that the Enterprise Value will increase significantly to over R25bn, creating an attractive grouping for international investors.

Local Advisers

Nedbank CIB, Rand Merchant Bank, Cliffe Dekker\ Hofmeyr, Bowmans, Webber Wentzel, Herbert Smith Freehills South Africa, PwC and Deloitte.

Comment from the Independent Panel: A difficult process, given the sensitivity of sharing information regarding a highly regulated industry and multiple operations.
It is noted that this transaction is still subject to approval.

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