Capricorn Group is expanding into South Africa through a R788-million acquisition of specialist asset financier Centrafin, taking an 81.6% stake.
This comes as the Namibian financial services group seeks new revenue streams beyond Namibia and Botswana.
The transaction values Centrafin’s entire business at an enterprise value of R788.3 million, subject to the finalisation of its audited financial results.
However, Capricorn has not disclosed the actual purchase price for the 81.6% stake.
The acquisition will also be funded through a combination of cash and debt facilities.
The group says the transaction forms part of its strategy to diversify its revenue base through strategic investments in South Africa, while adding specialist asset finance and non-bank lending capabilities to its existing portfolio.
Centrafin is a South African specialist equipment rental and asset financing business with an asset-finance book of about R3 billion.
Capricorn says the company has an established market position, experienced employees, an entrepreneurial culture, an established customer base and a recognised brand.
Capricorn Group chief executive David Nuyoma says South Africa was an important market for the group’s growth ambitions.
“Our ambition is to continue building a stronger, more diversified and increasingly regional financial services group, and the proposed acquisition of Centrafin represents a deliberate and meaningful step forward in that journey,” Nuyoma says.
He says the transaction would allow Capricorn to enter South Africa through an established financial services business rather than building a new operation from the ground up.
“It will also introduce specialist asset finance and non-bank lending capabilities to the sectors in which we participate, further diversifying the interests of our group,” Nuyoma says.
The deal gives Capricorn exposure to a different segment of financial services from its traditional commercial banking operations while providing a platform for growth in a market substantially larger than its established Namibian and Botswana markets.
However, Capricorn has not provided financial forecasts on the investment.
Under the proposed transaction structure, Capricorn will initially acquire 81.6% of Centrafin, with an option to acquire the remaining interest and ultimately reach 100% ownership over a five-year period.
Centrafin managing director Jenny Gill says the company had been looking for a long-term partner that could support its next phase of growth.
Centrafin has evolved from a technology equipment rental business into a diversified asset finance house, she says, with its R3-billion book spanning a broad range of asset classes.
“We believe Capricorn Group is the right partner to support the continued development of Centrafin, our employees, our customers and our broader stakeholder community,” Gill says.
Capricorn says Centrafin’s brand is expected to remain unchanged after it becomes part of the wider group.
The accepted binding offer does not, however, mean the transaction has been completed.
The parties still have to negotiate and execute definitive transaction agreements, while the deal is subject to approvals from the Bank of Namibia and South Africa’s competition commission, as well as compliance with applicable Namibia Securities Exchange requirements.
Certain other conditions precedent must also be fulfilled or waived by 31 January 2027, unless the parties agree to extend the deadline.
Capricorn says it would inform the market of material developments as the transaction progresses.
The group currently has operations spanning commercial banking, asset management, unit trust management, microlending and other financial services, with its principal businesses including Bank Windhoek, Bank Gaborone, Capricorn Asset Management, Entrepo and Peo Finance.
