Big changes for South Africa’s largest private security company

The commission has recommended that the Competition Tribunal approve the transaction whereby Fidelity will acquire SSG Holdings, with conditions.

SSG provides guarding services, technical and electronic security services, cleaning and hygiene services and facilities management – services that align with Fidelity’s offerings.

The Fidelity Group is primarily a provider of security services and ancillery services.

Its key areas of business include guarding services, technical and electronic security services, cleaning and sanitary services (including hygiene and pest control services), cash in transit services, cash processing services, cash handling devices, monitoring and response services.

The commission said that to address competition concerns, the parties have agreed that any restraints of trade implemented post-merger will be limited in duration to not more than three years and be limited to the activities conducted by SSG.

Further, Fidelity has undertaken to allow qualifying workers of SSG to participate in Fidelity’s employees share ownership scheme.

The second transaction approved by the commission was for New Seasons Security Services (NSSS) to acquire Fidelity, without conditions.

NSSS is an investment holding entity which was created specifcially for purposes of the transaction.

According to Fidelity, NSSS is a special purpose vehicle that was created as part of a “strategic simplificaton” of its shareholding structure.

“This initiative is designed to enhance liquidity for all shareholders, with particular focus on our longstanding Fidelity B-BBEE partners, who remain committed equity stakeholders in the group,” it said.

NSSS bears the namesake of New Seasons Investments, the BEE private equity partner of Fidelity which came on board during the group’s buyout in 2006.

New Seasons Investment Holdings was established in 1995 by Ashley Mabogoane and fellow founder members, Peter Vundla, Kgomotso Moroka, the late Jabu Mabuza and the late Enos Mabuza.

The group merged with Nodus Equity in 2018 to become an open-ended 51% black managed company, of which Fidelity is one of its most prominent partners.

The restructuring has again sparked speculation that the private security group is preparing for a listing on the JSE.

Talk of a Fidelity listing has been making the rounds for years, with insider reports back in 2022 saying that the firm was investigating a path to an IPO.

Fidelity told BusinessTech that, regarding a potential listing on the JSE, it “continues to explore a range of options that may facilitate capital realisation for all shareholders”.

“This process remains an ongoing priority as we assess opportunities that align with the group’s long-term growth and value creation objectives,” it said.

In the meantime, the Competition Commission has greenlit the next steps of the group’s plans to boost its business, directing the two transactions to the Competition Tribunal for approval.

Issued on BusinessTech by Staff Writer | https://businesstech.co.za/news/business/826165/big-changes-for-south-africas-largest-private-security-company/