1. BUSINESS DESCRIPTION

In 2019, Sango partnered with Medu Capital to establish the Medu Industrial Partnership as a limited life investment vehicle, that executed a secondary end-of-life acquisition of the 3 remaining assets from Medu Fund II. These assets were conglomerated into the South African Industrial Group (SAIG) a diversified industrials company that has expanded its activities into the manufacture and distribution of engineering components for the mining and automotive industries, steel rolls and copper and plastic tubing.

2. SANGO’S ROLE

Sango underwrote the equity purchase for the buy-out of the assets from the limited partners in Medu II which effectively allowed that fund to return all the outstanding capital to its investors and wind down the fund in an orderly manner. The transaction provided existing fund LPs with the opportunity to receive liquidity much earlier than would otherwise have been the case.

Sango and Medu’s thesis was to build an industrial platform through organic and inorganic growth which would be a more attractive target to strategic or financial buyers. As part of the transaction, a new CEO was appointed to run the consolidated group. In 2021 SAIG completed a bolt-on acquisition which had material synergies with the group.

Growth has been robust during Sango’s ownership period and the investment thesis delivered largely as expected.

3. CONCLUSION

This investment is an example of the opportunities that become available at the intersection of Sango’s deep relationship model within the private equity eco-system and the scarcity of innovative commercial capital. The SAIG acquisition enabled fresh and aligned capital to create a longer investment horizon for Medu and Sango to create value in assets that Sango and the GP knew well, while also unlocking liquidity for LPs who were happy to sell the assets at a reasonable discount to a party that they knew had the capacity to execute the transaction in a limited time frame.

SANGO VEHICLES INVESTED

Sango Private Equity II (“Fund II”) and Sango Private Equity III (“Fund III”).