March 2010

Whilst 2009 brought much economic uncertainty and with it lower levels of business activity, we are proud to announce a number of transactions that will ensure future growth and which evidences our ability to raise capital for clients in difficult economic times.

Spirit Capital Investments

Paladin Capital Acquires a 20% Interest in Spirit Capital

Private equity investor, Paladin Capital, has acquired a 20% interest in Spirit Capital.

Paladin Capital is a subsidiary of PSG Group Ltd and is its preferred investment vehicle in industries other than financial services and agri businesses. The investment in Spirit Capital is in addition to an already diverse portfolio comprising of thirteen listed and unlisted investments, which includes significant stakes in CIC, Petmin, Erbacon and TopFix.

“Through the 25% stake held by Paladin Capital’s 49% associate Thembeka Capital, we’ve had a close relationship for some time with the Spirit founders. The investment provides us with additional exposure to a company with strong management, who has been especially successful in the leveraged buy-out space. Going forward, we believe that there will be closer co-operation in unlocking other mutual benefits,” Paladin CEO, Francois Swart, said.

Commenting on the transaction, Kevin Homann, co-founder of Spirit said, "We are proud to have an investor of Paladin's quality and reputation as an anchor shareholder. They have been a supporter of ours for a number of years and, together with Thembeka Capital, provide us with a stable and supportive shareholder base. It really does set the company up for big things going forward.”

“Our model is to invest in businesses with good brands and excellent management. The investment horizon we have in mind when making an investment is forever. Fortunately, it is an investment philosophy that is shared by both Thembeka and Paladin,” Homann said.

Spirit Capital Acquires a Majority Interest in Ascot Site Solutions

The directors of Spirit Capital are pleased to announce the acquisition of a majority interest in the business of Ascot Site Solutions.

Ascot is a supplier of equipment, consumables, furniture and smalls to remote and mass accommodation sites, kitchens and laundries throughout Africa.

Ascot’s previous shareholder and founder wished to implement a transaction that resulted in senior management buying into the business upon his exit. This management buy-out transaction perfectly matches Spirit Capital’s investment philosophy and the transaction was successfully completed in December 2009.

We look forward to working with the Ascot team in the years ahead.

Corporate Advisory Transactions

Birchwood Debt Raising

Spirit Capital, corporate advisors to the Birchwood Management Company, has successfully negotiated a substantial senior debt facility with First National Bank. 

Birchwood operates a 450 room hotel and is one of South Africa’s largest conference venues close to OR Tambo International Airport.  Birchwood has acquired an adjacent piece of land and construction of an additional 212 rooms has commenced.  Upon completion, Birchwood shall boast the single largest hotel facility in the country.

The new facility shall be completely built and open for business prior to the commencement of the 2010 FIFA World Cup – now that’s Ayoba!

In closing, in as much as 2009 may have been a more difficult year, it has caused a number of opportunities to be rolled over into 2010, we look forward to sharing the details of those with you later this year.

Best Regards,
Team Spirit

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