Alexander Forbes to relist on the JSE


The company’s shareholders have decided to exit its current private equity ownership under the buyout firm, Ethos Private Equity Ltd, in the form of an Initial Public Offering (IPO).

The exit strategy options for the group were either an IPO or a sale to bidders.

“We have announced our intention to drive an IPO led exit from the current consortium,” Edward Kieswetter, Chief Executive Officer of Alexander Forbes told CNBC Africa on Thursday.

Generally, private equity players tend to invest for a period of seven years before exiting.  According to reports, Ethos bought into Alexander Forbes in 2007 along with private equity firm, Actis.

The consortium acquired and delisted Alexander Forbes from the JSE six years ago in a private equity buyout deal worth 8 billion rand.

Alexander Forbes therefore had prepared itself beforehand for the buyout firms exit.  

“We have been mindful that the exit was inevitable so in preparing for that, we went to the board and they approved an IPO led exit strategy,” he added.

In the wake of this decision however private equity firm, Actis, has chosen to keep its shareholdings in the group.

Despite this announcement, Kieswetter has stated that the core focus for the group is not on the exit but rather on building a sustainable organisation.

“We are focused on building a sustainable organisation, a stronger bias for growth and to rather focus on those things that give our business longevity. We are a people business,” he said.

He added that as part of their strategy, the group has been concentrating on prioritising their key business services, such as the employee benefits division and investments and disposing of other business divisions that aren’t their areas of expertise.

Evidence of this, Kieswetter pointed out, was shown in the group’s decision to sell their insurance risk broking business to the international advisory group, Marsh and McLennan companies, two years ago.  

“The Marsh’s actions 2 years ago was about getting out of the insurance risk broking business because clearly that part of the business needed a strategic partner of international stature and Marsh was a great fit for that merger,” he explained.

Alexander is also in the process of selling their insurance company, Guardrisk.

“Guardrisk is a wonderful business, in its own right but it also has the least strategic fit into the group. Our core business is defined around employee benefits and in addition to that, investments,” Kieswetter added.

The group also has plans to expand into Africa, starting with Ghana and Tanzania.