Namibian financial services group Capricorn Group is expanding into South Africa through the acquisition of specialist asset financier Centrafin. The deal, valued at R788.3 million, sees Capricorn take an 81.6% stake in Centrafin. This move is part of Capricorn's strategy to diversify its revenue base through strategic investments in South Africa. The acquisition will be funded through a combination of cash and debt facilities. Centrafin has an asset-finance book of about R3 billion and an established market position in South Africa.
The acquisition is a significant step for Capricorn Group, which has traditionally operated in Namibia and Botswana. Chief executive David Nuyoma says South Africa is an important market for the group's growth ambitions. The deal will allow Capricorn to enter South Africa through an established financial services business rather than building a new operation from scratch. It will also introduce specialist asset finance and non-bank lending capabilities to Capricorn's existing portfolio. Nuyoma emphasises that the transaction forms part of Capricorn's strategy to build a stronger, more diversified, and increasingly regional financial services group.
Centrafin managing director Jenny Gill says the company had been looking for a long-term partner to support its next phase of growth. Centrafin has evolved from a technology equipment rental business into a diversified asset finance house. Its R3-billion book spans a broad range of asset classes. Gill believes Capricorn Group is the right partner to support the continued development of Centrafin, its employees, customers, and broader stakeholder community. The acquisition is expected to bring benefits to both parties, with Centrafin's brand remaining unchanged after it becomes part of the wider Capricorn group.
The proposed transaction structure sees Capricorn initially acquire 81.6% of Centrafin, with an option to acquire the remaining interest and ultimately reach 100% ownership over a five-year period. However, Capricorn has not disclosed the actual purchase price for the 81.6% stake. The deal is subject to approvals from regulatory authorities and the negotiation and execution of definitive transaction agreements. Once completed, the acquisition will give Capricorn exposure to a different segment of financial services from its traditional commercial banking operations.
The acquisition provides Capricorn with a platform for growth in a market substantially larger than its established Namibian and Botswana markets. Centrafin has an established customer base, experienced employees, and an entrepreneurial culture. The company's recognised brand and market position are seen as key benefits for Capricorn. The deal also aligns with Capricorn's strategy to diversify its revenue base through strategic investments in South Africa.
While the accepted binding offer does not mean the transaction has been completed, both parties are optimistic about the future of the partnership. Capricorn Group's expansion into South Africa through the acquisition of Centrafin marks a significant milestone in the group's growth journey. The deal is expected to bring benefits to both parties, with Centrafin's expertise in asset finance and non-bank lending complementing Capricorn's existing portfolio.
The acquisition is subject to finalisation of Centrafin's audited financial results. Capricorn has not provided financial forecasts on the investment. However, the group is confident that the transaction will contribute to its growth ambitions and diversification strategy. The partnership between Capricorn and Centrafin is expected to support the continued development of Centrafin and its stakeholders.
Key points
- Capricorn Group acquires 81.6% stake in Centrafin for R788 million
- The acquisition provides Capricorn with a platform for growth in South Africa
- Centrafin's brand is expected to remain unchanged after it becomes part of the wider Capricorn group
