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Universal Partners sells YASA stake to Mercedes-Benz for R878m

‘The trend toward electrification is very strong … and we helped [YASA] to grow to the point where it’s able to interact with household names like Mercedes-Benz,’ which made a compelling offer: CEO Pierre Joubert.

FIFI PETERS: Let’s take a drive through the latest developments in the electric-car market. Universal Partners, an investment-holding company headquartered in Mauritius has raced past the finish line with its latest deal. It sold YASA, a company that manufactures parts for electric cars, to Daimler UK for R878 million. Daimler, as you know, is a subsidiary of Mercedes-Benz.

We do have Universal Partners CEO Pierre Joubert with us. Pierre, thanks so much for joining the show. I thought that the electric-car market was one of those industries of the future where big profits are expected to be made; why cash out now?

PIERRE JOUBERT: Fifi, we invested in YASA four years ago. They are an electric motor manufacturer and we saw great potential in this technology. As you say, the trend toward electrification is very strong; it’s something that we wanted to invest in, and we helped the company to grow to the point where it’s able to interact with household names like Mercedes-Benz. They liked the technology so much that they made us a compelling offer to buy it from us to take it further in its development lifecycle.

FIFI PETERS: Four years ago – so how did you stumble upon this PR asset? Were you actively looking for a company in this field? What was the history here?

PIERRE JOUBERT: The opportunity came through one of our directors who is based in the UK, Andrew Birrell. Through his network we were introduced to the company. We met with the CEO and the chief technology officer and the investment case was really compelling. We’ve spoken about the electrification trend that we were keen to back. We had a very good cultural fit with the management and the other investors in the company and we thought this was an excellent opportunity to put some of the money to work that we had raised when we listed five years ago in Mauritius.

FIFI PETERS: You spoke about the increased popularity that we have seen in the electric car space. Just talk to us about the pace of demand that you did see from some of these companies that you supplied, the likes of Mercedes-Benz that have been mentioned, but also Ferrari and McLaren, and there was another name in that statement that I told myself I’m not even going to try to pronounce.

PIERRE JOUBERT:These are very much the supercar niche manufacturers. McLaren and Ferrari were the initial adopters of the technology and that gave us an enormous amount of comfort around the technology that we were backing. These are some of the finest engineers in the world. Koenigsegg is the one that you probably didn’t want to mention. It’s, again, a very niche supercar manufacturer. But the first volume manufacturer that wanted to apply this technology across their fleets initially in the AMG range, but ultimately it will be filtered down into the rest of the range. It was Mercedes-Benz which then became the biggest customer of this business.

FIFI PETERS: What has the uptake for these electric components been in South Africa and Africa?

PIERRE JOUBERT:The African curve is probably slightly beyond where they are in Europe and to some extent the USA, and China, and probably largely to do with the charging infrastructure and the availability of rapid-charging stations. But the trend is nonetheless firmly in place as you see, particularly in Europe, the UK, the Scandinavian countries where the uptake of electric cars has been way ahead of the predictions that were made, say, three or four years ago. And one has just seen an acceleration of this trend and it’ll be with us for many years to come.

FIFI PETERS: Pierre, I have a question. What are your plans for the money you’ve received from this deal?

PIERRE JOUBERT: We have other investment opportunities that we are considering. We have a potential follow-on in some of our other investments that sit in our portfolio, and of course there is also the question of whether we declare a dividend or not. That is something that the board will consider when we meet in September. So there are many potential uses for the funds that have been received as a result of this deal.

FIFI PETERS: I know that your funds have been focused mainly in the UK and the European markets, but I’m just wondering if there is any appetite presently for investments on the continent.

PIERRE JOUBERT: Fifi, again our focus is to provide South African investors with offshore opportunities. There are many ways that they can access South African and African opportunities, so we are looking to provide something a little different.

FIFI PETERS: Okay, point taken. Pierre, thanks so much for your time and congratulations on that deal. Pierre Joubert is the CEO of Universal Partners.

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