Johannesburg - The Public Investment Corporation (PIC), acting on behalf of the Unemployment Insurance Fund (UIF), yesterday came out in support of about R1.8 billion in investment into listed Ascendis Health and diversified consumer goods business Bounty Brands.
It forms part of the funding of the recent acquisition by Ascendis of major European health-care businesses Remedica Holdings and Scitec International in separate transactions for a total of R7.3bn.
In a joint announcement yesterday, the PIC and Ascendis Health said the corporation had funded empowerment health-care investment holding company Kefolile Health Investments, a special purpose vehicle set up to participate in the Ascendis equity capital raise to the value of R500 million.
The PIC approved an additional facility to Kefolile Health Investments to the value of R100m for a direct investment in Ascendis Health’s Pharma-Med division by way of a preference share instrument.
The Pharma-Med transaction was expected to be concluded within a year and would result in the UIF owning 30 percent of Kefolile Health Investments.
The Kefolile team has been in discussions with Ascendis and Bounty Brands for the past 12 months after securing exclusivity with the companies and more recently concluding these arrangements when it obtained the required funding.
Kefolile will make an additional investment commitment into Ascendis over a period of four years to bring the total Ascendis investment to just under R1.4bn.
The investment into Bounty Brands is about R400m over three years, with Kefolile intending to partner with Ascendis and Bounty Brands as they expand their businesses both domestically and internationally.
Karsten Wellner, the chief executive of Ascendis Health, said yesterday that Ascendis was constantly in discussions with many potential shareholders but definitely favoured longer-term investors represented by the likes of Kefolile.
“We are excited to finally have Kefolile onboard as a significant long-term shareholder, especially since individuals within their investment team who have knowledge and expertise in the health sector had initiated an approach to invest into Ascendis as far back as last year,” he said.
The Ascendis investment is significant as it exposes the UIF to one of the critical players in the South African health-care sector.
Both transactions are in line with the PIC’s developmental investment mandate, which seeks to make investments that generate superior financial returns for the clients, have social impact and contribute to South Africa’s developmental objectives.
Along with the International Finance Corporation, a division of the World Bank, the PIC’s commitment supports the Ascendis rights offer and the vendor consideration placement, which will in turn facilitate the acquisition of Remedica and Scitec.
Remedica is a generic pharmaceutical company with a presence in over 100 countries and a major supplier of pharmaceuticals to non-governmental organisations active in medical relief.
Scitec is a leading European sports nutrition company that sells its products in nearly 90 countries globally.
The products and distribution networks offered by the three companies complement each other and will make it possible for the combined group to offer a broader range of health products to more people.
BUSINESS REPORT