One of Jala’s key investment strategies is the anchor and operating partner model which enables Jala Capital to add operational value to every transaction that we partake in.
We primarily seek companies where we are likely to gain control within a period of three to five years and/or acquire a significant minority stake.
"Niche markets” where there is an opportunity to be a global player e.g. motor industry component suppliers.
A passive investment strategy allows us to participate in investments which are neither our focus area nor the core business of Jala Capital.
Typically we would assume a strategic stake and thereby allow the other empowerment companies to take the lead with the transaction.
Jala has a sectorial focus, however each transaction is assessed based on our strengths and abilities to add value to the target investment.
Automotive industry
Industrial supplies
Mining supplies
Chemical Industries
Jala Capital is focused on revenue generation and improvement of profitability positions in the companies we invest in by leveraging the following factors:
Experience and skills of its shareholders
Management Expertise
Dynamic Networks
Being a partner that will add significant value to the companies they
have invested in
The role of a nchor partner :
will actively participate in the strategic management of their investee companies.
will provide strategic input at board level,
will accelerate the transformation process by assisting companies, by appointing black professionals with the relevant specialist skills. These include human resources and procurement strategies.
Jala Capital is looking to invest between a minimum R100 - R200-million in established mid-market companies with the following characteristics:
A minimum of R10 million after tax profits, consistently for 3-4 years.
Sound historical financial performance and stable, predictable earnings and cash flow; not valatile earnings.
An ability to service the interest and capital repayments with a significant part of the earnings converting into free cash on a normalised long term basis.
Reasonable security in the assets of the company for the purposes of raising senior debt funding.
A talented and committed management team.
Minimal or manageable technology risk.
Product lines with extended life cycles and low obsolescence risk.
A diverse mix of products, customers, geographic markets and suppliers.
Stable demand for products or services and a defensible market position.
Jala Capital will source senior debt as well as equity funding for a transaction using its well developed network of relationships in order to complement its own capital investment. In this way, it will be able to leverage its own capital two to five times on any given transaction, enabling it to target transactions involving businesses with enterprise values of between R200 million and R800 million.
What transactions will Jala Risk Capital avoid?
Jala Capital will target most industry sectors but will exclude:
Low-margin, trading businesses.
Businesses not complying with local or international labour, environmental and other laws.
Hostile takeovers.
Loss-making operational turnaround opportunities; and
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