Acquisitive
Russian-based Renaissance Capital is to begin irtegrating BJM Securities into its global emerging business portfolio stretching from Russia to New York after the completion yesterday of the acquisition of the brokerage firm for R207m.
The acquisition, announced in May, has received regulatory approval. It is Renaissance Capital's first investment in SA since it set up here in February.
Clifford Sacks, Renaissance Capital's CEO for SA and head of pan-African equities, said yesterday the acquisition would provide BJM Securities with enough balance sheet strength to take on competitors in a market that is highly competitive and short of specialist skills.
"Now that the acquisition has received the necessary regulatory approvals, we can now start the process of integrating the business into our global structure.
"We have a big muscle emerging markets platform and our near-term objective is to be able to complete this integration process, especially now that we have added more specialist staff to the team," Mr Sacks said.
BJM Securities had lacked the financial muscle and scale to attract bigger and global clients.
"If you want to bring it to basics, although BJM is the preeminent research firm in the industry, it lacked balance sheet strength and distribution. We now have that scale using our global offices and emerging markets presence,: he said.
BJM Securities had already recruited top analysts and investment bankers as Renaissance prepares to take on the local and African market.
"You might say we have hit the ground running," Mr Sacks said.
The opportunity to buy BJM Securities had come at the right time, he said, remarking how difficult it was to start a brokerage business from scratch, given the capital and skills required, and the time it took to establish scale and a strong brand.
Renaissance Capital's staff in its African operations (Nigeria, Kenya, Zambia, Ghana and SA) had doubled to 110 with the acquisition of BJM Securities.
The acquisition would also boost revenue, he said.
Referring to financial performance, Mr Sacks said he would rather discuss numbers next year.
Renaissance was convinced of the potential of Africa where it wanted to replace global competitors who were fond of sending in 'briefcase bankers' who worked on deals and then went home.
Foreign investors were seeing Africa in a new light after the downturn in Europe and the US last year, he said. Yesterday, Thomson Reuters said the value of mergers and acquisitions in sub-Saharan Africa had doubled in the first half of this year.
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