Ethos buys controlling stake in S.African auto firm - CNBC Africa

Ethos buys controlling stake in S.African auto firm

Southern Africa

by Reuters 0

AutoZone is a South African car parts seller. PHOTO:

This is after it sold a tyre retailer in November.

Private equity investors are ramping up activity in sub-Saharan Africa to tap into rapid economic expansion and growing consumer spending on the continent. The purchase is the fourth through Ethos’ 7.9 billion rand Fund VI.

Ethos will take up the stake held by RMB Corvest, the private equity arm of Rand Merchant Bank and Zico Capital, which they jointly acquired in 2010.

(WATCH VIDEO: Ethos closing its sixth fund)

AutoZone has 151 wholly-owned retail and wholesale outlets, and nearly 40 franchises in five southern Africa countries.

Under the deal, Ethos, Autozone’s senior management and black empowerment investors, will own 100 per cent of the company, the private equity firm said, without giving more details.

South African companies are required to meet targets on black ownership and hiring under the government’s policy of black economic empowerment, or “BEE”, designed to address the inequalities of the apartheid system that ended in 1994.