In September 2007, Primedia was de-listed from the Johannesburg Stock Exchange following a R7 billion buy-out led by the Mineworkers Investment Company (MIC), Issie and Willam Kirsh and 49 key managers of Primedia. The buy-out resulted in MIC and the Kirsh Consortium significantly increasing their respective shareholdings, further strengthening their long standing partnership. Black ownership in the group has effectively doubled and for the first time, a significant number of the senior managers own a material stake in the group.

The transaction was, at the time, largely financed by international banks and hedge funds using bridge financing ultimately aimed at the European high yield bond market.

Brait was introduced as a strong and credible private equity investor, investing R850 million of equity and mezzanine capital. The equity stake represents 20% of Primedia. The investment is one of Brait’s largest private equity investments to date and has significantly strengthened the company’s balance sheet.

Commenting, John Gnodde, Executive Director of Brait, said: “We are very happy to become shareholders in Primedia as it fits very well within our philosophy of investing and partnering with industry leaders, companies with good growth prospects, well regarded and incentivised management and strong cash flow generators.”

Following the investment made by Brait, Rand Merchant Bank (RMB) has structured and arranged an innovative local financing package to replace a R3,9 billion senior bridge loan that was put in place following the buy-out and subsequent restructuring of the group. The package, co-underwritten by RMB and other local investors, including Old Mutual Specialised Finance and Vantage Capital, is the largest of its kind in the local markets. Emrie Coetzee, Head of Acquisition and Leverage Finance at RMB, said: “We have been bankers to Primedia since its inception and our strong relationship as well as our good understanding of the company enabled us to put together an effective funding package which we were able to get underwritten in the local markets within a very short space of time.”

Paul Nkuna, CEO of MIC, said: “We are extremely happy that all aspects of the transaction have now been finalised, importantly with local institutions which we know well and with whom we have a track record of working well together. We are also happy that senior management of Primedia and Brait now sit side by side with us as co-investors in a much stronger, empowered Primedia.”

Commenting, William Kirsh, CEO of Primedia, said: “With the capital structure now finalised, we can now focus exclusively on growing our businesses and continuing to lead in the sectors in which we operate. We are also pleased that we have started the financial year well posting a 16% growth in revenue to R1,645 billion and improved operating margins for the 6 months ended 31 December 2007.”