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As private equity buyers exit investments, Goldman Sachs sees wave of South African listings

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January 21
1:51 AM 2014

Goldman Sachs Group Inc is forecasting a wave of initial public offerings in South Africa for the first time in three years as private equity buyers exit their investments, Bloomberg reported. Goldman Sachs Group was the Number 1 underwriter of IPOs in 2013, the report said.

In an interview, sub-Saharan Africa Goldman Sachs Head Colin Coleman told Bloomberg, "There could be a new wave of listings because of private equity portfolio exits." However, he did not reveal any other firms planning to hold their debuts except for retirement fund administrator Alexander Forbes Ltd which has already unveiled its IPO plans slated for the second half of this year, the report said.

Citing data from JSE Ltd, the report said there were 12 companies that held their IPOs in Johannesburg. This was also the same number of firms that held their debuts in 2012. The figure was much higher in 2011 when 16 firms went public. Analysts like Chris Gilmour of Absa Asset Management Private Clients told Bloomberg that Edcon Holdings (Pty) Ltd may think of undertaking an IPO. Edcon Holdings is a retailer bought by Bain Capital Partners LLC in a $2.5 billion deal in 2007, the report said.

Meanwhile, the report said Deutsche Bank AG and Rand Merchant Bank were hired by Alexander Forbes to advice on a listing. In 2007, Actis LLP, Ethos Private Equity Ltd and other private equity investors bought Alexander Forbes for a price tag of $757 million, the report said.

An Ernst & Young LL report issued last month said initial share sales in the emerging markets will increase this year as economic conditions continue to remain steady and the mainland China exchanges open again. E&Y said this will pave the way for at least 50 IPOs in the first quarter with companies in the technology, real estate and financial sectors leading the listings for 2014, Bloomberg reported.

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