Lonsa buys Everite for R600 million

MAURITIAN investment group Lonsa Group (Lonsa) has acquired fibre cement manufacturer Everite for Rand 600 million.

Everite was formerly majority owned by Group Five (GF). The 80-year-old company, which manufactures a range of building products for the commercial, industrial and residential markets, was put up for sale after the former construction giant went into business rescue in 2019.

Lonsa chair Robin Vela said GF would not normally have sold this “cash cow”, but its demise had created an opportunity for his consortium.

Lonsa chair Robin Vela

“This is a massive vote of confidence in South Africa (SA)’s struggling construction sector,” he said.

The deal, which is effective May 01, includes the Everite group’s assets, businesses and companies, including Sky Sands and Sheet-rite, as well as the purchase from a third party of the freehold property from which Everite operates.

The transaction was partially debt-financed by Nedbank.

Lonsa Everite, the special-purpose vehicle incorporated to complete the acquisition, is 56 percent owned by Lonsa, 15 percent by the former GF subsidiary’s management, while Legacy Africa Capital Partners and business person Muvhango Netshitangani own 25 percent and five percent, respectively.

Lonsa emerged as the successful bidder after a highly competitive auction.

Everite and its various related businesses and subsidiaries employ more than 500 people.

Lonsa invests in the energy, industrials, logistics and property sectors in Africa.

“We acquired Everite because of its… record of profitability and cash generation as well as its significant tangible growth prospects into the rest of Africa, which is currently underserved,” Vela said.

“Now less than 10 percent of Everite’s revenue comes from African countries other than SA and we want to change that,” he said.

Everite is the only large-scale fibre cement manufacturer in SA and sub-Saharan Africa.

It is positioned for growth in the green and alternative building technology and the autoclaved aerated concrete market.

Everite is a unique licensee of Hebel Autoclaved Aerated Concrete by the German Xella Group.

“Everite is a direct enabler of infrastructure and affordable housing development, and an indirect contributor to the creation of employment and alleviation of poverty in Africa,” Vela said.

GF was placed in business rescue about two years after experiencing financial problems due to its financial exposure in Africa and a lack of contracts.

From a peak market value of R8,2 billion in 2007, the company was worth less than R100 million when its shares stopped trading.

Vela, who was hounded out of Zimbabwe a few years ago, is one of a few businessmen chased out of the country, but making waves in the region and creating massive opportunities for other economies.

Meanwhile, the Lonsa founder has since fired BDO SA – whose local peer he is tussling with over a Nssa audit – from auditing the R1,5 billion Everite’s books. – businesslive.co.za