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JSE
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RAUBEX GROUP LIMITED - To list on the JSE - Press Realese
RAUBEX GROUP LIMITED TO LIST ON JSE ON 20 MARCH 2007
Private placing roadshow commences Monday 5 March 2007
* Leading road construction company in South Africa
* One of the largest listings on the JSE in recent years
* Listing in the Industrials - Heavy Construction sector of the JSE
* Market capitalisation of approximately R2.4bn at issue price
* Private placement to raise R754m - R838m via a book building exercise
Francois Diedrechsen, Raubex`s Financial and Commercial Director, said:
"This is a major milestone in the history of Raubex. The company has an
excellent 30 year track record and is a market leader in road construction
and rehabilitation in South Africa. The listing will contribute towards
the future growth of our business as we scale up to take advantage of the
significantly increased investment in infrastructure in South Africa over
the next few years. I am excited about the prospect of moving onto the
next phase in the company`s history and look forward to welcoming our new
shareholders."
INTRODUCTION
Raubex, a dynamic South African road construction group plans to list on
the JSE on 20th March 2007 in the industrial heavy-construction sector.
This represents the biggest direct listing on the JSE for about three
years. The market capitalisation is estimated to be approximately R2.4
billion and the company is poised to benefit from increasing infrastructure
spend in South Africa over the next five to ten years.
Raubex was founded by J E `Koos` Raubenheimer in Bloemfontein in 1974 and
it has delivered consistent growth and uninterrupted profitability for over
three decades. The Group comprises of three main divisions being road and
civil infrastructure construction, road rehabilitation and aggregates and
employs over 2 800 people. The company`s vision is to become the leading
road construction and associated infrastructure operator in southern
Africa.
OFFERING HIGHLIGHTS
* Raubex will be listed in the "Industrials - Heavy Construction" sector
of the JSE
* The Offer price range is expected to be between R13.50 and R15.00 per
share, implying a market capitalisation of between R2.2 and R2.4
billion
* The Offer, which is being managed by Investec Corporate Finance
through a book building process, comprises a private placing of 55 852
730 Raubex shares being sold by current shareholders. Subject to a
further allotment (`greenshoe`) option granted by the company to
Investec Corporate Finance, the free float on the JSE once the listing
is concluded will be between 34.4 and 37.5%
RATIONALE FOR LISTING
Raubex has outgrown its private company status and in pursuing its intended
vision the listing will allow it to achieve the following:
* Greater access to capital markets
* Attract and retain the best talent in the industry
* Unlock value for existing shareholders and create value for future
shareholders
* Raise the Company profile leading to new business opportunities
KEY STRENGTHS AND OPERATIONAL ADVANTAGES
The Raubex Group has distinct strengths and competitive advantages
considered to be the following:
* An experienced management with a proven track record: The senior
executive and divisional management of Raubex have approximately118
years of collective experience with the company
* Leading positions in attractive markets: Raubex`s market presence,
scale and geographic reach of its operations gives it a clear
advantage relative to smaller, localised competitors
* Well established, recognised brands: Raubex offers its products and
services through well-established brand names in each of the markets
in which it operates. Brands such as Raumix, Raubex Construction and
Roadmac have been in existence for many years and enjoy significant
brand recognition in the industries in which they operate. The Raubex
brand has been in existence for more than 30 years
* Balanced business portfolio: Raubex has a balanced portfolio across
its lines of business and geographies. It also has a robust and
diverse customer base including government organisations throughout
southern Africa
* Proven financial performance and stable cash flows: Raubex has shown
significant growth and increased profitability over the last three
years and has an uninterrupted profit history spanning over three
decades
* Raubex fleet of plant and equipment: Raubex Group owns and operates
one of the largest fleets of road construction and maintenance
equipment and by far the largest fleet of `road reclaimers` in South
Africa
Operational advantages include
* on-site mechanical division which minimises redundancy time,
optimising the utility of plant and equipment which is one of the most
technologically advanced and modern in the country
* possess an African patent for an ultra thin asphalt surfacing called
ULM
* well positioned aggregate crushing operations and mobile crushers are
strategic assets
* it is one of the few companies with a maximum CIDB rating of nine -
the highest possible rating which enables the company to tender on any
capital project in South Africa
EMPOWERMENT CREDENTIALS
The Company is proud of its BEE credentials and is more than 28.24% owned
by previously disadvantaged groups. Raubex has two main anchor BEE
shareholders in Matlapeng Holdings (Proprietary) Limited and Kenworth
(Proprietary) Limited, who collectively own 26.29% of the issued share
capital of Raubex.
This BEE shareholding is a near unencumbered interest in Raubex. This as an
important advantage in its business strategy and will result in no dilution
for shareholders.
Raubex`s anchor BEE shareholders carry full equity and voting rights
participation and are actively involved partners in the management and
operations of Raubex. They have agreed to a five year "lock-in" period
post listing, so as to maintain Raubex`s BEE shareholding above 26%.
Raubex`s other BEE shareholders (who collectively hold 1.95% of the issued
share capital of Raubex) will have a three year phased "lock-in" period
post listing.
STRATEGIES FOR GROWTH
The key elements of Raubex`s strategy are to:
* Maximise profitability of established businesses: In all the markets
in which it has established operations, Raubex intends to continue its
ongoing business optimisation programmes, seeking to maximise return
on new capital expenditure and focusing on the improvement of key
business drivers with the goal of maximising profitability
* Improve market position: Raubex aims to be the market leader in the
markets in which it operates. Raubex continually seeks opportunities
to further strengthen its position in its key markets, and believes
that it is well-positioned to benefit from further industry
consolidation in southern Africa
* Expand existing businesses into new geographies: Raubex will look to
penetrate new geographic markets where it believes it can achieve a
leading position. Raubex`s expansion strategy is to identify countries
with favourable economies and end-user markets, which will allow it to
leverage off existing infrastructure
CURRENT TRADING ENVIRONMENT AND GROWTH PROSPECTS
Raubex has bright prospects organically in view of the accelerated road
development programme in South Africa and also acquisitively due to the
opportunities for consolidation in the industry. The Directors will
proactively continue to identify value-enhancing opportunities for the
various divisions of the group. In southern Africa, acquisitions in
geographies well known to the Company may also be considered. Zambia is a
primary area of focus as all Raubex`s divisions operate there and prospects
for expansion are good.
Locally, a number of government led initiatives particularly projects such
as the planned road network upgrades should inevitably result in increased
demand for the services provided by the Raubex Group.
As a publicly traded company Raubex will be better placed to participate in
Public Private Partnerships due to the enhanced financing options available
to Raubex as well as its enhanced profile. The impact of this should be
positive on Raubex in light of the government spending plans on
infrastructure and in the tendering process for PPP projects in South
Africa over the next five to ten years.
Recent announcements by the South African government indicated
infrastructure spend of R372 billion over the next five years and more
specifically a road spend of over R60 billion over the next 3 years. The
SAICE report dated November 2006 rated the country`s infrastructure an
unsatisfactory D+ overall. Roads were rated even less satisfactory at D-
to E+.
ENDS
02 March 2007
CONTACTS
Raubex 012 665 3226
Francois Diedrechsen
College Hill 011 447 3030
Fred Cornet 083 307 8286
Jacques de Bie 082 691 5384
http://www.raubex.co.za
Date: 02/03/2007 07:31:00 Produced by the JSE SENS Department.
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