The rise of interconnected devices and cyber-physical systems is changing the way cities, factories, buildings and infrastructure operate globally – and Africa is no exception.
PUBLICATION: FA NEWS | DATE: 26/07/2018
Futuregrowth Asset Management has identified commercial and industrial technology as a sector set for rapid growth, and wants to ensure its investors – primarily pension funds – stand to benefit.
Futuregrowth has taken a substantial stake in Symion, a commercial and industrial technology group, through its Development Equity Fund.
The investment will fund Symion’s acquisition of companies in its targeted industries, which include intelligent automation and robotics; renewable energy systems and electric vehicle infrastructure; smart buildings and cities; advanced safety and security technology; and intelligent water management.
“Infrastructure development is becoming more sophisticated and more sustainable thanks to new technologies,” said Amrish Narrandes, a private equity analyst at Futuregrowth.
“This is an exciting and fast-growing sector, and we believe there is tremendous opportunity for the application of Symion’s products. There are not many ways for pension funds to gain exposure to this sector locally, which offers us a first-mover advantage,” said Narrandes.
"Symion is pleased to have attracted such a blue chip investor that can assist us in achieving our goal of being Africa’s foremost platform for intelligent infrastructure solutions,” said Rick Basson, managing director at Symion.
“We were very specific in seeking out investors with access to capital, strong networks and a long-term investment horizon, and who also shared our vision that technology has an important role to play in addressing Africa’s infrastructure backlog,” said Basson.
Symion’s acquisitions to date
Symion has acquired quality assets since it was founded in 2016 and two significant acquisitions are FS Group and Rubicon which align with its safety and security, automation and renewable energy platforms.
FS Group’s products and services allow customers to create safer working environments for their staff and customers. “A great practical example is their cutting edge CCTV systems that enhance security on university campuses, shopping malls or large scale mines,” said Narrandes. The company also offers the latest products in site access control, electronic fire detection, and rapid response voice evacuation systems.
Rubicon is a market leading supplier to the industrial automation, machine safety, renewable energy and electric vehicle sectors in South Africa. They offer clean energy solutions that will enable the phasing out of environmentally-damaging fossil fuel energy production. Rubicon is also positioning itself as a key player in the electric vehicle charging infrastructure market as this develops over the coming years.
Symion will continue to acquire companies in its target sectors and seek out market leaders that have long track records of growth and longstanding relationships with key customers and suppliers.
“We believe Symion is very well positioned for strong growth,” said Narrandes.
“The underlying businesses have strong platforms established, good cash generation and are in good positions to take advantage of growth opportunities. All management teams (including Symion’s) are young, dynamic, and aligned to our shareholders’ interests.
“With our long track record of investing in the infrastructure space, we also have first-hand experience and understanding of the market need for the products and services Symion is offering.”
Futuregrowth’s Development Equity Fund
This fund has a long track record of making equity investments with a developmental focus in sectors such as education, affordable housing, healthcare and SME development.
The Symion investment aligns with the fund’s developmental focus in that many of the company’s products are focused on clean and efficient energy services and sustainable usage of existing resources as well as intelligent safety and security technologies. These will improve safety standards and working environments for millions of workers and ordinary citizens across South Africa.
“At the outset this investment may seem slightly different from other projects we’ve invested in in the past, such as affordable housing or sustainable agriculture, but we believe that Symion’s products and technologies will have a tremendously positive impact on the lives of ordinary South Africans in future. At the same time, we believe this investment opportunity will offer significant value for our shareholders,” said Narrandes.
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