ETHOS SELLS OUT OF TRANSACTION CAPITAL AT NEW HIGH

Transaction Capital
GLOBAL CAPITAL
08 DEC 2015

Ethos Private Equity launched today the sale of its last shares in Transaction Capital, the Johannesburg-listed commercial finance company, as an accelerated bookbuild.

Rand Merchant Bank is leading the sale of the 7.7% stake, which came after Transaction’s shares hit an all time high today of R11.90. The stock closed at R11.20.

The sale of 43.8m shares would fetch R490m ($34m) before any discount.

Ethos has been invested in Transaction since 2006. The business floated in 2012 for R738m at R8 a share. It now has a market cap of R6.4bn ($440m).

The company has two business divisions: asset-backed lending, which finances the purchase of some 25,000 taxis, and transaction capital risk services, which manages the non-performing loans of 5.7m borrowers ”” about one in six South African adults.

The company has performed strongly, with headline earnings up 19% in the financial year to September 2015, to R393m. Return on average assets rose from 3.5% to 4.4%.