Ethos Acquires AutoZone in South African Private Equity Deal
Ethos Private Equity Ltd. bought a controlling stake in South African closely held automotive-parts retailer AutoZone, the fourth investment through its 7.9 billion-rand ($682 million) Fund VI.
“We anticipate growing the business geographically,”Christo Roos, a partner at Johannesburg-based Ethos who will join AutoZone’s board, said in an e-mailed statement on Wednesday. “We have already identified immediate opportunities and have embarked on a rigorous program to accelerate AutoZone’s growth strategy.”
Founded in 1999, AutoZone has 151 retail and wholesale branches and 37 franchised outlets in South Africa, Namibia,Zimbabwe, Swaziland and Botswana. Ethos bought the stake for an undisclosed amount from Rand Merchant Bank’s private-equity unit and investment company Zico Capital, with debt for the deal provided by Barclays Africa Group Ltd. (BGA)
RMB Corvest, the RMB unit, bought AutoZone from Super Group Ltd. (SPG), a Johannesburg-based transportation and distribution company, in 2009 for 435 million rand when the retailer’s annual trading profit was 17.5 million rand, according to a Super Group statement at the time.
Under the deal announced Wednesday, AutoZone management and black investors will hold the shares in the company not owned by Ethos, the private-equity company said, without disclosing the size of the holdings. South Africa’s government is pushing businesses to increase black involvement in the economy to help make up for apartheid, when most business opportunities were reserved for the white minority.
Ethos’s previous investments through Fund VI include stakes in South African logistics supplier RTT Group, clothing retailer Kevro and industrial-services group Waco International.