Alexander Forbes Said Talking With Motsepe’s ARC on AfriNet

  • African Rainbow Capital to use purchase for African expansion
  • AfriNet contributes about 6.1% to Alexander Forbes profit

Alexander Forbes Group Holdings Ltd., a South African financial services company, is in talks to sell a stake in its AfriNet unit to African Rainbow Capital Pty Ltd., according to a person familiar with the matter.

African Rainbow Capital, chaired by billionaire Patrice Motsepe, plans to use the AfriNet acquisition to expand its operations outside South Africa, the person said, asking not to be identified because talks are private.

Motsepe, 54, the richest black South African with a fortune of $1.7 billion, started African Rainbow Capital in April with access to as much as 17 billion rand ($1.22 billion) in capital. He plans to build a financial-services company controlled by black people and spanning everything from life insurance and healthcare to money management and banking. AfriNet offers insurance and risk management services in 30 African countries.

African Rainbow Capital co-Chief Executive Officer Johan van Zyl declined to comment. Lynn Stevens, a spokeswoman for Alexander Forbes, declined to comment.

Profit Growth

Alexander Forbes rose as much as 4.5 percent before paring gains to trade 2.5 percent up at 6.66 rand as of 9:47 a.m. in Johannesburg. The shares have gained 15 percent this year, giving the company a market value of 9 billion rand.

Companies in South Africa have sold stakes to black investors to compensate for discrimination under apartheid, which ended in 1994, with the economy still controlled by the white minority. Alexander Forbes said in March it started talks with a black-owned partner about an investment in the group’s African subsidiaries and said on July 25 the talks were continuing.

In the fiscal year ended March, AfriNet’s profit from operations grew 23 percent to 74 million rand and its assets increased by more than 9 percent to 4.33 billion rand, according to Alexander Forbes’ annual report. AfriNet’s contribution to group profit has risen to 6.1 percent by March from 4.7 percent two years ago.

Alexander Forbes, which had an initial public offering in 2014 after its private equity owners exited the investment, is 33 percent held by Marsh & McLennan Cos.’s Mercer unit, according to data compiled by Bloomberg.

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