We make individual investments from R10 million to R100 million in size in small and medium sized enterprises. Some of our more tangible investment criteria are discussed below.
Company Size
We, typically, look for companies whose enterprise value (the combined value of their equity and long term debt), at the time of our investment, lies in a range between R20 million and R200 million, although we will consider higher values in leveraged buyout situations or in syndication with co-investors.
Use of Capital
We provide capital for the following types of transactions:
- Growth capital ─ we inject equity capital into companies that require funds to grow organically, including companies that have yet to reach profitability.
- Acquisition finance ─ we provide equity and loan funding to companies that wish to grow through acquisitions of other companies.
- Buyouts ─ we provide equity and mezzanine debt to facilitate the buyout of companies from their current shareholders in conjunction with existing or new management.
- BEE (Black Economic Empowerment) ─ we can facilitate the introduction of BEE shareholders to a company through a leveraged recapitalisation.
- Recapitalisations ─ we provide the equity and mezzanine debt for the recapitalisation of businesses in which management retains significant ownership.
- Public-to-private transactions ─ we can provide equity financing for smaller listed public companies to go private though an offer to their public shareholders.
- PIPES (Private Investment in Public Enterprise) ─ we will occasionally purchase preferred or ordinary shares in publicly listed companies.
Geography
Most of our investment activity is focused on southern Africa, but we will readily consider investments in the rest of sub-Saharan Africa in conjunction with a local co-investor.
Industry Sectors
Historically, our investment activity has been concentrated around information technology, communications, payment technologies, retailing and distribution, logistics, food processing, healthcare and industrial manufacturing.
In each of these fields we have developed a deep base of relevant industry knowledge and an extensive network of professional contacts. For more information, see our investment portfolio.
Although these sectors remain of high interest to us, we will also consider investments in many other sectors. Throughout its history, Horizon Equity Partners has enjoyed meaningful success investing in industries of which we had no experience prior to our first investment in that industry.
Industry sectors of particular interest to us right now include: cleantech, alternative energy, and business process outsourcing. However, we know that good businesses can be found in almost every industry sector, so we have an open mind at all times.
What we don’t invest in
Our money comes with a conscience. We can’t invest in any company whose business is defence-related or involves tobacco, gambling, alcohol, pornography, indentured labour or any other ethically questionable or environmentally harmful practice.
In addition, we don’t currently invest in real estate, mining or primary agriculture. And last, but not least, we no longer invest in start-up enterprises… unless they’re founded by Steve Jobs. Sorry.
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