Capitec is selling its rental finance unit.
Image: Supplied
Sunlyn, one of the major investments within the Sasfin stable, has entered into a transaction to acquire Capitec Rental Finance (CRF), bringing together two established businesses in South Africa's equipment and rental finance sector.
The acquisition will further strengthen Sunlyn's position as a leading rental finance business in South Africa and expand its ability to support equipment suppliers and their business clients across the country, a statement from Sasfin said Friday.
Capitec’s share price inched up 0,18% by midday Friday to R4708,60 per share. However, the share price has gained 38,7% over a 12-month period, a big gain for one of South Africa's biggest banks in terms of client numbers.
Capitec Rental Finance has established a strong presence in the rental finance market through its focus on providing flexible funding solutions that enable businesses to acquire the equipment and technology they need to grow and remain competitive. Established in 2011, Capitec acquired it in 2019 as part of its acquisition of Mercantile Bank.
The business is profitable, bringing an established client base, experienced teams, and longstanding supplier relationships that complement Sunlyn's existing strengths.
“CRF’s business does not align with Capitec’s core strategic focus. The board believes CRF would benefit from integration with a specialist operator,” Capitec's directors said in a statement.
“This transaction allows CRF to be integrated with Sunlyn, a market leader that is better positioned to maximise value from the business. The disposal consideration is R201 million,” they said.
For Sunlyn, the acquisition represents a natural extension of a business that has built "a market-leading position" over several decades.
Backed by Sasfin, which has transformed into an investment holding company, Sunlyn has successfully transitioned to a non-bank alternative lending platform that provides tailored funding solutions to equipment suppliers and their business clients.
Sunlyn CEO Linda Fröhlich said the transaction was an exciting opportunity for them and an important step in Sunlyn's growth journey.
“Capitec Rental Finance has built a respected business with a strong reputation, an established client base, and experienced teams. We believe the combination of our businesses will enhance our ability to serve clients, suppliers, and business partners across South Africa while continuing to deliver the personalised service and tailored solutions for which both businesses are known," she said.
Harriet Heymans, recently appointed MD of Sunlyn, added: "This transaction enhances Sunlyn's scale and market reach, further strengthening our ability to support equipment suppliers and their business clients."
Heymans said they greatly valued their collaboration with Capitec throughout this process, including the provision of a R1.6 billion secured credit facility that supports the ongoing funding requirements of the combined rental receivables portfolio.
Whilst the parties seek the necessary regulatory approvals, both businesses will continue to operate independently and in the ordinary course, with service delivery, relationship management, and client support remaining unchanged.
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