Transaction Capital Says It Has $72 Million for Acquisitions

Transaction Capital Ltd., which finances minibus taxis used to transport commuters from South African townships, plans to spend as much as 750 million rand ($72 million) on acquisitions.

“We want to become dominant” in the financing of small businesses by buying some niche players, Chief Executive Officer David Hurwitz said in an interview in Johannesburg on April 8, without naming the companies. The cash is available “for the sole purpose of acquisitions in our lending and services divisions,” he said.

South Africa may appoint a minister of small enterprise development after the May 7 general election, Johannesburg-based Beeld newspaper reported today, citing ruling African National Congress Secretary-General Gwede Mantashe. The government is trying to stimulate the continent’s second-biggest economy after growth slowed to a four-year low of 1.9 percent in 2013.

Transaction Capital distributed 2.10 rand a share to investors on March 17 after last year selling its stake in unsecured lender Bayport Financial Services for 1.33 billion rand and disposing of Paycorp Holdings to buyout firm Actis LLP for 937 million rand. The company may also expand its debt collection unit, MBD Credit Solutions, and draw on experience in asset-backed finance to make acquisitions in insurance services, Hurwitz said.

Transaction Capital climbed 1 percent to 5.15 rand as of 1 p.m. in Johannesburg, where the company started trading in June 2012. The stock has dropped 6.8 percent this year, cutting the firm’s market value to 3 billion rand.

The company is due to release results for the six months through March on May 6.

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