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Transaction Capital in acquisitive mode

Firm to deploy R500m for acquisitive growth.

Specialist financial services company Transaction Capital is to acquire majority stakes in Johannesburg-based RoadCover and The Beancounter.

RoadCover is a subscription-based service, which provides members with legal and administrative services, related to lodging and processing claims against State-run public schemes and State insurance funds.

Transaction Capital is offering RoadCover’s products to its existing clients in the banking, retail, insurance and telecommunications sectors, enabling the clients to generate higher risk-adjusted returns, through the engagements with customers at point of origination, the company said in a statement.

It may also offer the products to its SA Taxi clients and their customer bases.

Through The Beancounter, an accounting, payroll and services company geared toward small and medium enterprises (SMEs), Transaction Capital is to gain early entry into the domestic cloud accounting services market. It said the acquisition will add to business solutions currently on offer to its SME client base.    

Transaction Capital previously announced that it would acquire 100% of Australia’s Recoveries Corporation Group, a provider of debt recovery solutions, insurance claims recoveries, customer services and litigation services. It is to pay AUD $33 million (R356 million) upon the acquisition in February 2017, with a further AUD $10 million potentially payable over an earn-out period ending in June 2018.   

“We have applied stringent investment criteria when evaluating acquisitions, favouring quality assets operating within our focused market segments that will enable Transaction Capital to enhance its capabilities, and whose business model and value can be maximised through Transaction Capital’s active management,” CEO David Hurwitz said in a statement.

Transaction Capital said it has R300 million in liquid cash on its balance sheet after the acquisitions.  

The group grew headline earnings per share (Heps) by 17% to 80.6 cents for the year ended September 30 2016. It declared a dividend of 30 cents per share, up 36% from a year earlier.

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