Patrice Motsepe-Backed ARC Fund To Buy And Delist Services Group CSG Holdings

Services group CSG Holdings is to be delisted from the JSE after the Patrice Motsepe-backed ARC Fund acquired its remaining shares.

The offer to buy CSG for cash consideration of 35c a share is being done through UBI General Partner, in its capacity as general partner of the ARC Fund, which through its wholly-owned portfolio investment company, Gemcap, is a 24.8% indirect shareholder in the company.

CSG advised its shareholders that one of the conditions for the offer is that the company must be delisted from the JSE.

“The transaction will be implemented on the basis that shareholders will be afforded an
opportunity to either monetise their investment in CSG at a fair price or to continue to hold their shares in an unlisted environment,” CSG informed investors on Monday.

ARC Fund invests in a broad range of sectors and through a variety of unlisted and listed
entities and generally seeks to gain exposure to growth and early-maturity stage businesses in which management teams are appropriately incentivised.

Where the ARC Fund holds the majority or significant minority interests in portfolio companies, where appropriate, it seeks to provide broad strategic guidance through representation and participation on the board of directors of such companies.

The ARC Fund, as a Broad-Based Black-controlled investment vehicle, provides solid
empowerment credentials, access to capital, relationships, synergies and strategic support
(i.e. governance, human capital) to investee companies.

“Following the recent restructuring and realignment of CSG together with the changes in the executive structures, the Offeror (ARC Fund) believes the timing is opportune to facilitate a turnaround strategy for CSG together with management and other strategic shareholders,” said CSG.

“From the Offeror’s perspective, one of the key building blocks to a successful turnaround for CSG is to transform CSG to a black owned and controlled entity, specifically as it operates in the contract services sector where empowerment credentials are key to growth – including, amongst other services, the provision of catering, staffing, cleaning, security and mining services to a wide range of clients.

“The Offeror believes it can achieve this through the Offer as the Offeror is a broad-based black economic empowerment investor with a significant network of businesses. In light of this, the Offeror believes that it is ideally positioned as a partner to help drive growth
and value creation for CSG.”