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COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: LM052May17
In the matter between:
ACTIS IMPACT LIMITED AND MCO
and
IMPACT HOLDINGS (MAURITIUS S.A.) LIMITED
Panel
Heard on
Order Issued on
Reasons Issued on
: AW Wessels (Presiding Member)
: M Mazwai (Tribunal Member)
: I Valodia (Tribunal Member)
: 14 June 2017
: 14 June 2017
: 11 July 2017
NON- CONFIDENTIAL REASONS FOR DECISION
APPROVAL
Acquiring Firm
Target Firm
[1] On 14 June 2017, the Competition Tribunal ("Tribunal") approved the proposed
transaction involving Actis Impact Limited ("Actis"), MCo and Impact Holdings
(Mauritius S.A.) Limited ("Impact").
[2] The reasons for the approval of the proposed transaction follow.
Parties to the proposed transaction
Primary Acquiring Firms
[3] The primary acquiring firms are Actis and MCo.
[4] Actis is a newly established private company incorporated in accordance with
the laws of Mauritius. Actis is controlled by Actis Africa Real Estate Fund 3
("Actis Fund") which is managed by Actis GP LLP. Actis, Actis Fund and Actis
1
GP LLP and any firms managed or advised by these entities _are collectively
referred to hereinafter as "the Actis Group".
[5] The Actis Group is a global emerging markets private equity investor, generally
investing in buy-outs of companies or non-core divisions of large corporations
and in private companies seeking to achieve rapid growth organically or through
acquisitions, privatisations or restructurings. Actis Fund is a private equity real
estate fund targeting property investments in sub-Saharan Africa. However,
pre-merger it does not have any investments or operations in South Africa; the
proposed transaction will be its first investment in South Africa.
[6] MCo is yet to be established as a private company to be incorporated in
accordance with the laws of Mauritius. MCo will be ultimately controlled in equal
parts by the existing shareholders of the Target Group ("the Existing
Shareholders") (see below). The Existing Shareholders consist of private
companies and trusts, ultimately controlled by four brothers. The Existing
Shareholders control the lmprovon Group (see below).
Primary Target Firm
[7] The primary target firm is Impact, a special purpose vehicle established for the
purpose of the proposed transaction and incorporated in accordance with the
laws of Mauritius. It was established as a holding company into which Actis and
the Existing Shareholders will invest in order to establish a joint venture
comprising certain property assets currently held by the Existing Shareholders.
[8] On completion of the proposed transaction Impact wilt control: lmpro REIT
Limited ("lmprovon"), as well as certain entities holding various property
investments which do not form part of the lmprovon Property Companies ("the
Out of Fund Companies")1 and certain entities which provide a range of
1 The Out of Fund Companies are: Cool Ideas 281 (Pty) ltd, Cool Ideas 208 (Pty) Ltd, Dacorp Park
Properties (Pty) ltd and Repo Wild 89 (Pty) ltd .
2
property management. construction and development services ("the Operating
Companies")2•
[9] lmprovon controls the following firms: RFC Land Two (Pty) Ltd, Arena Props 9 (Pty)
Ltd, lmprovon Growth Fund 1 (Pty) Ltd, lmprovon Property Fund 1 (Pty) Ltd, lmprovon
Property Fund 2 (Pty) Ltd, Black Ginger 248 (Pty) Ltd, Bridoon Trade and Invest 10
(Pty) Ltd and Wavelengths 124 (Pty) Ltd (collectively referred to as "the lmprovon
Property Companies").
[1 O] lmprovon, the lmprovon Property Companies, the Out of Fund Companies and the
Operating Companies therefore constitute the target group to be acquired in
the proposed transaction ("the Target Group" or "lmprovon Group").
[11] The lmprovon Group is a specialised real estate investment group that is
focused on the industrial and logistics property sector of South Africa. Its
primary property portfolio comprises of premium industrial and logistics
premises located in strategic nodes across South Africa.
PROPOSED TRANSACTION AND RATIONALE
[12] The proposed transaction involves a series of inter-conditional and indivisible
steps, ultimately resulting in the Actis Group and MCo (controlled in equal parts
by the Existing Shareholders) each holding [ ... ]3 shareholding in Impact. The
Out of Fund Companies will become subsidiaries of lmprovon and the
Operating Companies will be held directly by Impact. The remaining shares in
Impact will be held by a management entity which would possess no form of
minority control.
[13] In terms of rationale, Actis submitted that the proposed transaction facilitates
the creation of a joint portfolio of sub-Saharan African industrial and logistics
properties.
2 The Operating Companies are: lmprovon Property Projects (Pty) Ltd, lmperio (Pty) Ltd and Jmprovon
Properties (Pty) Ltd.
3 The merging parties have claimed confidentiality over the percentage shareholding .
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[14] The Existing Shareholders submitted that the proposed transaction facilitates
the lmprovon Group's continued growth and enhances its competitiveness.
IMPACT ON COMPETITION
[15] The Competition Commission ("Commission") found no horizontal overlap
between the activities of the merging parties. None of the Actis Group's
investments in South Africa overlap with the activities of the lmprovon Group.
Although the Actis Group has certain investments in real estate, it does not
have any such investments in South Africa.
Public interest
[16] The merging parties confirmed that the proposed transaction will have no
negative effects on employment and particularly that there will be no
retrenchments as a result of the proposed transaction.4
[17] No other public interest concerns arise from the proposed transaction.
Conclusion
[18] In light of the above, we conclude that the proposed transaction is unlikely to
substantially prevent or lessen competition in any relevant market. In addition
no public interest issues arise from the proposed transaction. Accordingly we
approve the proposed transaction unconditionally.
MrAw~
Ms M Mazwai and Prof. I Valodia
Tribunal Case Manager:
For the Commission:
Alistair Dey-Van Heerden
Zanele Hadebe
11 July 2017
Date
For the Merging Parties Burton Phillips of Webber Wentzel Attorneys
4 Merger Record, pages 12, 20 and 109.
4