Actis sells off a large stake in Alexander Forbes

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Private equity investor Actis has sold a nine per cent stake in Alexander Forbes, representing a large part of its total 13 per cent stake.

As the company prepares for a full exit from the financial and risk services provider, Alexander Forbes, Mercer Africa Limited, a subsidiary of global consulting firm Marsh & McLennan Companies, has agreed to acquire 34 per cent of Alexander Forbes, as part of Actis’ exit deal.

Actis initially led the 1.2 billion US dollar buyout of [DATA AFH:Alexander Forbes Groups Holdings] in 2007 which has officially been its largest and most complex leveraged buyout ever undertaken in Africa.  

(WATCH VIDEO: Actis: Emerging Market Private Equity)

“It is fantastic to see Alexander Forbes embark on the next stage of its development. We are extremely proud of our work transforming the business. Alongside the management team and other shareholders, we have achieved a tremendous shift in the business, one that epitomises our investment philosophy of our capital being more than solely financial,” said Natalie Kobe, a partner at Actis.

“The strong interest we have received, in one of the largest listings in sub-Saharan Africa ever, signals significant appetite from both African and international institutional investors.”

According to Actis, the investment will allow Mercer to broaden its exposure in sub-Saharan African markets.

(READ MORE: Alexander Forbes following reform-ready countries)

Firstly, Mercer will acquire a 14.9 per cent stake at the time of the Alexander Forbes listing. After regulatory approvals, the firm will acquire an additional 19.1 per stake, which will then lead to a complete exit for Actis and other private equity consortium members who collectively hold 54 per cent of the group pre-listing.

(READ MORE: Alexander Forbes to relist on the JSE)

Actis stated that it has transformed Alexander Forbes by hiring a highly qualified senior management team, recovering reputational issues that plagued the business, attracted industry experts to its board, develop a retail offering and expanding profit margins through the disposal of non-core business units.

(READ MORE: Alexander Forbes to take lessons from private consortium)