CompCom thwarts Ethos’s sale of Neopak to Corruseal

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South Africa’s Competition Commission has ruled against the sale of Neopak Holdings, a paper and packaging company acquired by Ethos Private Equity in 2015, to the Corruseal Group, a black-owned manufacturer and supplier of packaging in South Africa. The decision, which is based on the deal’s potential to reduce competition in the market, prevents the sale agreed between Ethos and Corruseal from moving ahead. As yet, there have been no public comments from either of the parties involved in the transaction.

The decision also denies, perhaps temporarily, an exit for Ethos’s sixth fund which closed with R8.6 billion (or about $590 million at today’s rates) in 2011. From the statement issued by CompCom regarding the decision, it does not appear that the parties have much wriggle room to make changes that might satisfy any of the agency’s concerns. At the time of the deal announcement, Michael Jensen, a Partner at Ethos, suggested that the sale was not Neopak’s only option. He noted that the levels of “…unsolicited interest we have seen from potential buyers serves as a strong endorsement of the attractiveness of the business,” indicating that Ethos may have some other prospects capable of taking Neopak off their hands.

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