Old Mutual and Sphere Investments Acquire Much Asphalt for R1.1 Billion to Boost South Africa’s Road Infrastructure

Old Mutual Private Equity (OMPE) and Sphere Investments have announced a significant agreement with AECI Limited to acquire 100% of Much Asphalt, a leading manufacturer in South Africa’s road surfacing industry. The deal is valued at R1.1 billion and will be financed through a mix of debt and equity.

Strengthening South Africa’s Road Infrastructure

Much Asphalt is recognized as the premier commercial manufacturer of asphalt and bituminous binders and emulsions in South Africa. The company’s unique position as the only provider with a nationwide presence makes it crucial for the road surfacing sector.

The transaction is anticipated to close in the first quarter of 2025, pending customary regulatory approvals. This investment is seen as aligned with the South African Government’s goals of enhancing road infrastructure, a vital driver of economic growth and job creation.

“We believe that investing in the country’s road infrastructure aligns with the objectives of the Government of National Unity,” stated OMPE and Sphere in a joint announcement. They highlighted that Much Asphalt is well-positioned to play a significant role in the nation’s road infrastructure expenditure over the medium to long term.

A Strategic Investment for OMPE Fund VI

This acquisition marks the inaugural and anchor investment for OMPE’s newly launched OMPE Fund VI. Both OMPE and Sphere plan to collaborate closely with the Much Asphalt management team throughout the investment period.

Through careful stewardship, capital, and strategic perspective, the firms aim to foster transformative growth and business transformation. Their goal is to deliver attractive returns to investors while positively impacting the lives of employees and communities.

Jacci Myburgh, Co-Head of OMPE, expressed confidence in the South African Government’s infrastructure repair initiatives, indicating a focus on sectors expected to recover to more normal levels. “An effective road network is critical to the exciting rebuild underway in South Africa, which should stimulate economic growth and create new jobs,” Myburgh noted.

Expert Management Team and Future Growth

Burchert Johannes, Investment Principal at OMPE, praised Much Asphalt’s experienced management team, which has successfully navigated various industry cycles. He emphasized the firm’s commitment to partnering with them and Sphere to pursue the company’s growth ambitions.

Mohammed Sabi, Director at Sphere, highlighted the investment’s role in enhancing road infrastructure, which is vital for economic development. “Our investment in Much Asphalt continues our 21-year track record of supporting high-quality businesses supplying essential goods and services,” Sabi said.

Bennie Greyling, Managing Director of Much Asphalt, expressed enthusiasm about the partnership. “We look forward to the next chapter in our business growth through the collaboration with Old Mutual Private Equity and Sphere, two highly respected financial investors in the South African landscape,” Greyling remarked.

The acquisition of Much Asphalt by Old Mutual Private Equity and Sphere Investments signals a significant commitment to strengthening South Africa’s road infrastructure and economic prospects. As the nation navigates its recovery, this partnership is poised to play a vital role in enhancing the quality and efficiency of its road networks, ultimately benefiting the economy and communities across the country.