Building your Business: Post Investment Value Add in Private Equity

As an emerging market, South Africa is experiencing several challenges to economic
growth. The private equity team at Agile Capital have the experience to carefully navigate
through the current climate, and continue to be able to create economic sustainability
within their portfolio of companies to encourage steady growth, while still looking to future
growth prospects.


It’s important to discuss Post Investment Value Add strategies that come into play after a
transaction. Building partnerships with the management teams of any portfolio companies,
prior to completing any transaction is part of this. This means that even before the
transaction is finalised, there already is a strong working relationship. This enables driving
post investment growth as the strategic alignment within the business has already been
established.


The value of having management teams that have a deep understanding of the business
and that have a shared vision for the success of the business cannot be overstated. This
enables the Agile team to support management from a strategic and governance
perspective as non-executive directors, while management drive operational efficiencies,
get the right financial strategy and controls in place. The management can remain focused
on the best results for the business, and the private equity team is able to assist with
effecting structure and good corporate governance and inorganic growth through
acquisition where these opportunities are identified by either party.


As a black owned private equity business Agile Capital is able to bring considerable
benefits of BEE credentials to any investment, but the focus is growth and supporting
management’s strategic direction in those businesses in which Agile Capital invests.
Private equity value add often takes the form of leveraging relationships with financial
institutions to optimise the capital structures and assist with growth. In addition, Agile
Capital endeavours to find opportunities within the portfolio network for driving growth for
its investee companies where it makes sense for both businesses.


According to Deloitte’s Private Equity Review 2022, 14% of private equity firms in SA are
intending to focus on bolt-on and tuck-in acquisitions to strengthen their portfolio
companies. Some portfolio companies have adopted the strategy to grow through bolt-on
acquisitions. This allows them to expand their product or service offering as well as their
footprint, while benefiting from economies of scale. Reputable private equity partners are

able to get involved in the process of assessing the investment opportunity through
valuation, financial modelling and due diligence in support of the management teams.
Other considerations in these processes include assessing the timing of the acquisitions,
considering the cash flow and macro-economic factors. It’s also important to look at the
culture fit, including the retention, incentivisation and integration of key management of
the target company.

Our philosophy at Agile Capital ensures the sustainability of our portfolio companies
beyond our involvement with them. As a result, this means that we actively drive the
management team to prioritise succession planning and the upskilling of second tier
management. This ensures that as founders exit and industries evolve, the business can
continue to adapt with continuity and institutional memory.
While there are still concerns for local mergers and acquisitions like a stable electricity
supply and uncertainty around government policy, the South African market is still able to
offer value. At Agile, we believe that education, healthcare, automotive and the services
sectors still have opportunities for local investors. We continue to look for long term
growth prospects for the businesses within our portfolio and have confidence in our
management teams we are invested alongside.

CONTACT US

Illovo point, Unit 1203, 12th Floor,
68 Melville Road, Illovo,
Sandton, 2196

+27 (0) 10 476 0690

info@agilecapital.co.za

Agile Capital is an astute and principled South African mid-market private equity investment firm, offering a solid investment track record and long term growth prospects

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CONTACT US

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