Super Group R5.7bn Deal: Buys DIG for Mining & Fleet Expansion
- Super Group, a South African logistics and fleet management company valued at R5.7 billion, has finalized its acquisition of a 70% stake in the DIG Group, marking a...
- The acquisition represents a strategic move for Super Group, extending its fleet solutions business into a new segment and bolstering its presence in capital-intensive industries.
- According to Super Group, DIG’s established relationships with original equipment manufacturers, its modern fleet, and strong safety record position it favorably within the mining supply chain.
Super Group, a South African logistics and fleet management company valued at R5.7 billion, has finalized its acquisition of a 70% stake in the DIG Group, marking a significant expansion into the mining services sector. The deal, announced on , has received unconditional approval from the Competition Tribunal, clearing the final regulatory hurdle.
The acquisition represents a strategic move for Super Group, extending its fleet solutions business into a new segment and bolstering its presence in capital-intensive industries. DIG Group specializes in plant and heavy equipment hire for the mining sector, providing machinery such as earth movers, excavators, and dump trucks to operations across 19 mining sites in South Africa, supporting clients in coal, chrome, and gold mining.
According to Super Group, DIG’s established relationships with original equipment manufacturers, its modern fleet, and strong safety record position it favorably within the mining supply chain. The company reported a normalised profit after tax of R191.5 million for the year ending , demonstrating a robust earnings base that Super Group is acquiring.
The total cash outlay for the controlling stake is R448 million, with additional payments contingent on DIG’s future profit performance. The transaction is expected to be effective from .
Super Group’s financial position appears well-suited to support acquisitions of this scale. Recent reports indicate positive free cash flow, reduced gearing, and a disciplined approach to capital allocation, providing the company with flexibility for both organic growth and strategic acquisitions. The group recently unlocked R7.47 billion in capital with the sale of SG Fleet and distributed R5.54 billion to shareholders in the form of a special dividend.
The sale of SG Fleet has significantly strengthened Super Group’s balance sheet, reducing net gearing from 136.3% to 20.6% and improving the net debt to EBITDA ratio from 2.96x to 0.75x. This financial maneuver has provided the company with increased capacity for strategic investments like the DIG Group acquisition.
While Super Group’s revenue from continuing operations decreased by 7.6% to R23.67 billion in the six months to , driven by weaker performances in its UK Dealerships and Supply Chain Africa Commodity businesses, the company’s overall financial health remains strong. Annual revenue for the year ending was R44.51 billion, a decrease of 1.4% from the previous year.
Despite a slight decrease in earnings per share to 237.2 cents and headline earnings per share to 239.8 cents for the year ending , Super Group’s net tangible asset value per share increased substantially by 281.4% to R26.32. This increase is largely attributable to the divestment of SG Fleet.
Peter Mountford, CEO of Super Group, highlighted the company’s preparedness for expansion in a letter to shareholders, indicating a positive outlook for future growth across its core operations. The acquisition of DIG Group is seen as a key component of this expansion strategy, providing access to a growing market and strengthening Super Group’s position in the mining sector.
The DIG acquisition expands Super Group’s exposure to capital-intensive industries with high barriers to entry, offering a potentially lucrative growth market. The move signifies a deliberate effort by Super Group to diversify its portfolio and capitalize on opportunities within the mining supply chain.