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CONSTRUCTION WORLD
OCTOBER
2016
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PRODUCTS AND SERVICES
The business rescue process –
which started last year and offi-
cially ended this week – included
the acquisition of the company
by corporate investment and transactional
advisory firm Jacobs Capital and its partners,
Black Bird Capital (headed by Nkosinathi
Nhlangulela and Siyabonga Mncube).
Creditors received 100 cents in the
rand and shareholders will be paid a 35%
premium on the list price. Most importantly,
all employment contracts were saved.
The board of directors is in the process
of being reconstituted. “We have wasted
no time since the deal was approved by the
Competition Commission in June. All the
conditions of sale have been met. This is a
very exciting time.
“We have teams in place looking at
all aspects of the business and strategic
planning sessions have produced short and
longer term plans,” said Wessel Jacobs, chief
executive of Jacobs Capital.
The addition of the Masonite business
at Estcourt, KwaZulu-Natal, to the Jacobs
Capital portfolio marks the third large invest-
ment by the group in 12 months, and it is
expected to make a meaningful contribution
to the annual revenue of the company, whose
investments already exceeds R1,5-billion.
Since its establishment in 2002, Jacobs
Capital has completed over 50 restructuring
projects including the successful turnaround
of Da Gama, one of the largest textile mills in
South Africa.
Jacobs said Masonite is a strong company
and the deal was structured to ensure that all
creditors were paid out leaving the company
with a debt free balance sheet and working
capital of R85-million as well as R100-million
in stock holding.
“Extensive recapitalisation of the
production lines is necessary to ensure that
the Mill runs at full capacity which will ensure
that the company is able to return to sustain-
able profit as quickly as possible. A new
product line is also among plans to ensure
that Masonite keeps up with market trends,”
said Jacobs.
“We believe that the modernisation of
the mill will prepare it for expansion into new
markets and products. This will contribute
towards Masonite business maintaining its
position as a leading producer of hardboard
and timber products,” he added.
Nkosinathi Nhlangulela, director and
shareholder added: “The company is now
100% locally owned with a new board that
understands local conditions and impera-
tives. We see this as a long term commitment
to both the business and the KwaZulu-Natal
region. The new Millco leadership team is
well placed to ensure a sustainable, ‘built to
last’ business approach.
“It combines local management expe-
rience and expertise and offers access to
strategies, systems and methodologies
that have proven successful in turning
around a number of South African manufac-
turing businesses.”
An upbeat Hilton Loring, Masonite chief exec-
utive, said the company was back on track.
“The lead management team is in place with
renewed energy and entrepreneurial spirit.
This combined with investment and a new
product line will ensure the company meets
growing demand and provides Masonite
products of the same high quality and stand-
ards that customers expect.
Jacobs said he was confident that the
oldest company listed on the Johannesburg
Stock Exchange was poised to regain its place
in the economy. “We have an excellent team
that can restore this business and take it to
new heights.”
In terms of the ratified transaction,
the Millco Consortium has purchased the
Masonite Mill. The Masonite forestry assets
have been sold to Forestco which is owned
by R&B Timbers and an agreement is in place
that secures the supply of timber for Masonite.
The Estcourt Mill, in the KwaZulu-Natal
Midlands, which produces hardboard, soft
board and door panels, was damaged in
an explosion in June 2014. This, together
with a difficult trading environment, saw
the company apply for business rescue in
December last year.
Because Masonite has been in business
rescue, its trading on the JSE has been
suspended. Details of the listing on the
Johannesburg Stock Exchange are still to
be finalised.
Jacobs Capital was established in 2002
as a private investment company. Since
then, it has developed from exclusively
acquiring and establishing businesses, to
incorporating independent divisions that
provide an extensive range of business advi-
sory services as well as manage turnarounds,
mergers and acquisitions.
It portfolio includes leading workwear
manufacturer MB Workwear, textile compa-
nies Da Gama and Gelvenor, automotive
component supplier Connecto Fasteners.
Unlike other potential private equity
investors, Jacobs Capital is able to draw
on extensive in-house expertise to imple-
ment a strategy that will see Masonite
taken out of business rescue within a short
period of time.
BREATHING NEW LIFE
into wood company
A recapitalisation programme and an investment of over
R300-million are on the cards for KZN-based Masonite, a major
South African manufacturer of high quality engineered wood.
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Siyabonga Mncube (Black Bird Capital), Wessel Jacobs (Jacobs Capital), Nkosinathi Nhlangulela
(Black Bird Capital) and Hilton Loring (Masonite).
“We believe that the
modernisation of the mill will
prepare it for expansion into
new markets and products.
This will contribute towards
Masonite business maintaining
its position as a leading
producer of hardboard and
timber products.”