South Africa’s private equity firm Ethos announced on Wednesday that it has sold its 1.4% stake in FinTech player Channel VAS.
The company said it has has sold a 1.4% stake in Channel VAS at a consideration of $5 million (R76.6 million).
“In line with the Board’s stated strategy of optimising capital allocation and enhancing shareholder value, Ethos Capital has sold a 1.4% stake in Channel VAS at a consideration of US$5 million (R76.6 million),” the company said.
“The sale consideration has valued Ethos Capital’s stake in Channel VAS at $36.7 million (a 16% premium to the valuation as at 30 June 2020). Over the two-year hold period, this partial realisation delivered in ZAR a money back multiple of 1.6x and an IRR of
Post the transaction, Ethos Capital will retain an aggregate stake of 8.89% in Channel VAS with a valuation (based on the transaction value) of $31.7 million.
Ethos added that the sale consideration has valued Ethos Capital’s stake in Channel VAS at
$36.7 million (R750 million) (a 16% premium to the valuation as at 30 June 2020).
“The proceeds of the sale will be used to repay existing borrowings in Ethos Capital which will provide additional flexibility to execute on its strategies to enhance shareholder value,” the company informed investors on Wednesday.
Channel VAS is the premium FinTech provider of mobile financial services, airtime credit & airtime advance services, handset loans and big data analytics, all through cutting edge proprietary analytics tools.
Operating since 2012 and expanded to more than 42 countries in Africa, Middle East, Asia and LATAM with a focus in emerging markets, Channel VAS supported mobile network operators (MNOs) and financial institutions to provide over R204 million ($12 million) credit daily to more than 750 million people in 2020 and continues to expand to new markets globally.
Channel VAS has shown strong operational growth during the past 12 months, Ethos informed investors on Monday.
Channel VAS saw 40% growth in EBITDA in rand terms to June 2020 broadly across territories and customers.
The firm added that Channel VAS has no debt.
Ethos received R22 million in dividends during the year.
For more read: Channel VAS is Firing on All Cylinders