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[2020] ZACT 80
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Agile Capital Four (Pty) Ltd v Averge Technologies (Pty) Ltd (LM133Nov19) [2020] ZACT 80 (29 January 2020)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: LM133Nov19
In
the matter between
Agile
Capital Four (Pty) Ltd Primary
Acquiring Firm
And
Averge
Technologies (Pty) Ltd Primary
Target Firms
and
K.2019302693 (South Africa) (Pty) Ltd
Panel
: Ms Y Carrim (Presiding Member), Ms A Ndoni (Tribunal Member), Prof.
H Cheadle (Tribunal Member)
Heard
on : 15 January 2020
Order
Issued on : 15 January 2020
Reasons
Issued on : 29 January 2020
REASONS
FOR DECISION
Approval
[1]
On 15 January 2020, the Tribunal unconditionally approved the
proposed transaction in terms of which Agile Capital Four
(Pty) Ltd
(Agile) is acquiring control over Averge Technologies (Pty) Ltd
(Averge) and K2019302693 (South Africa) (Pty) Ltd (AVT2).
[2]
The reasons for the approval of the proposed transaction follow.
Parties
to the transaction
[3]
The primary acquiring firm, Agile, is a newly established firm that
does not have any activities. Agile is controlled
by Agile Capital
400 (Pty) Ltd (Fund Manager) and Corvest 12 (Pty) Ltd (Corvest 12).
Two individuals, Mr Ettiene de Wet Visser
(Visser) and Mr Johannes
Samuel Gouws (Gouws) also form part of the acquiring firm for the
purpose of this transaction.
[4]
The controllers of Agile are active in, inter alia, private equity,
management buyouts and buy-ins and have investment
holdings in
various sectors.
[5]
The primary target firms are Averge and AVT2. Averge is controlled by
Visser, and AVT2 does not have any entity controlling
it
pre-merger.
[1]
[6]
Averge has five key divisions namely, (i) DC Power Systems, (ii)
Energy, (iii) Telecommunications, (iv) Network Optimization
and (v)
Specialised services. In summation, Averge is a specialist
distributor of a range of products which include supplying back-up
batteries and fibre optic components for use in the communications
industry and supplying overhead line equipment for use in the
energy
sector. AVT2 provides the same products and services as Averge.
Proposed
transaction and rationale
[7]
The proposed transaction entails the acquisition of certain minority
protections by Agile in Averge and AVT2 which will
confer control
over them. Post-merger, Averge will be controlled by Agile and
Visser. AVT2 will be controlled by Agile, Visser
and Gouws.
Impact
on competition
[8]
The Competition Commission (Commission) considered the activities of
the merging parties and found that the proposed transaction
will not
result in any overlaps in any market. This is because the merging
parties do not provide services that are substitutable,
nor do the
merging parties have a business relationship.
Public
interest
[9]
The proposed transaction does not raise any public interest concerns.
Conclusion
[10]
In view of the above, we concluded that the proposed transaction is
unlikely to substantially prevent or lessen competition
in any market
in South Africa. In addition, no public interest issues arise from
the proposed transaction. Accordingly, we approved
the proposed
transaction unconditionally.
Ms
Yasmin Carrim
Ms
Andiswa Ndoni and Prof. Halton Cheadle concurring.
Date:
29 January 2020
Tribunal
Case Manager : Kgothatso Kgobe
For
the Merging Parties: C Thomas and L Granville of Cliffe Dekker
Hofmyer
For
the Commission: N Msiza and M Aphane
[1]
Hearing Transcript, page 2 lines 16-17.