Veteran South African Dealmaker in Talks to Sell Long4Life

(Bloomberg) -- Old Mutual Ltd.’s private equity arm is in talks to buy Long4Life Ltd., the South African investment company founded by entrepreneur Brian Joffe, according to people familiar with the matter. 

The buyout firm has funds available that could go toward an acquisition of the Johannesburg-based group, said the people, who asked to remain anonymous as talks are ongoing. A final agreement hasn’t been reached and a deal may not be finalized, they said. 

Long4Life, which owns retailer Sportsmans Warehouse and beauty-salon chain Sorbet, was valued at 4.1 billion rand ($267 million) as of Tuesday’s market close. The stock has declined 13% since an initial public offering in 2017, despite more than doubling since this time last year.

The shares jumped as much as 2.6% after the Bloomberg News report before paring gains.

The company said in a statement last week that it’s in talks with a potential buyer after receiving an unsolicited expression of interest, without identifying the suitor. A spokesman declined to comment further. Old Mutual Alternative Investments also declined to comment. 

Joffe, 74, has a long history of dealmaking, having built industrial conglomerate Bidvest Group Ltd. through a series of acquisitions over almost 30 years. He stepped down from that company after spinning off food-delivery firm Bidcorp Ltd. in 2016, and went on to put 100 million rand of his own money into Long4Life. He is due to step down as chief executive officer next year, moving to the chairman role.

The entrepreneur and fellow directors have become frustrated that Long4Life’s market value is lower than the sum of its parts, and hired Investec Ltd. to review the company’s structure earlier this year. That makes the firm an ideal takeover target, said the people.

A successful deal would fit with Old Mutual’s interest in the retail sector. The buyout firm’s Private Equity Fund IV, which is 3.7 billion rand in size, has invested in shoe chain Footgear and sports companies The Pro Shop and Cycle Lab. 

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