Rhode Island Capital

Rhode Island Capital (Pvt.) Ltd. Acquisition & Privatisation

This transaction was for the (i) migratory telephony and IP (“MTIP”) networks sector for the DRC, and (ii) the Haulage & Courier sectors of business. To achieve this objective, we have drawn in experts and specialist in both of these industry sectors.

Our company was again enlisted to be the “Deal & Project Lead” and

  • To provide both Board and Management Direction;
  • To investigate and direct its strategy on the acquisition of an intercontinental courier and haulage company and
  • To also provide Management and Transaction advisory services (on a circa R160 – R280 million deal).

All of the above was initiated alongside Napoleon and Vogel Attorneys (Cape Town, South Africa); and another Rhode Island (USA) set of legal advisors/counsel.

Because this is a fairly sensitive deal and it involved multiple geographically located investors (some of which are in South Africa), the exact detail of the transaction cannot be elaborated upon.

Additionally, as we were both partner and advisor, our partnership approach in this transaction was to subcontract some of the services offered to Rhode Island Capital (“RIC”) to senior industrial sector advisers.

These parties, led by CFIT’s consultants

  • Initiated the “Heads of Agreement” for the transaction;
  • Reported on areas that interim management would have to focus its attention on as the transaction developed further.
  • Developed the open market tender specifications for the respective (“MTIP”) areas of interest.
  • Advised on the future investment & exit strategy for RIC and its investment partners.
  • Submitted other privatisation strategy proposals for consideration by the Rhode Island [interim] Capital Board; and
  • Provided the multi- geographical Board preparation materials and documents for the RIC Board.

 

Although this was CFIT’s very first large private equity deal, we remain conscious of the fact that it led too other such private to public market ownership conversions. We note this aspect because our experiences indicate that when structuring a multi – geography deal, and especially one that stretches over an Emerging Market and a more “stable”/established market, the cost of capital fluctuates at an indeterminable rate and pace (at times).

We believe that the implications of these fluctuations create different sets of cost implications and therefore for the growths that would be experience in Emerging Markets. An observation in that regard is that the fluctuations in these markets results in good fortune for acquisitive companies. Such acquisitive activity inevitably is interpreted as being good and positively contributory to the growth rates in Emerging Markets.