Deal Summary
Nedbank Private Equity (NPE) and MineWorkers Investment Company (MIC) have formed a consortium to acquire an 85% equity stake in Tropic Plastic and Packaging, a Durban-based flexible packaging manufacturer. Founded in 1963 by the Bhaba family, Tropic specializes in manufacturing polyethylene films and their derivatives for extrusion, printing, bag-making, and lamination, primarily supplying the fast-moving consumer goods (FMCG) sector. The company serves multiple blue-chip clients, including Exxon Mobil and major South African packaged food corporations.
Terms
- Fund Managers: Nedbank Private Equity (NPE) and MineWorkers Investment Company (MIC)
- Equity Stake: 85%
- Fund: Nedbank Private Equity Fund (NPE 2)
- Deal Type: Majority Buyout
- Target Company: Tropic Plastic and Packaging Industry
Deal Rationale
The plastic industry is a complex, global operation involving several stages: extraction of raw materials from fossil fuels, conversion into pellets, manufacturing into final products, and distribution to markets. The industry is undergoing significant shifts towards sustainability and a circular economy model that emphasises resource reuse and recycling, moving away from the traditional linear economy based on a take-make-dispose approach. Tropic operates in South Africa's flexible packaging segment, which dominates the market due to the cost-effectiveness of polyethylene for businesses seeking to reduce manufacturing costs. The company's investment in advanced technology enhances its manufacturing capacity. This financing provides Tropic with growth capital to invest in environmentally friendly manufacturing processes, aligning with new sustainability trends.
About the Fund Managers
Nedbank Private Equity, founded in 1996 and based in Sandton, South Africa, is an open-ended captive fund focused on replacement capital, expansion capital, and buyouts. The fund invests a minimum of R50 million ($2.8 million) and a maximum of R500 million ($28.3 million), with over 95 investments to date. The entity is engineered through the Nedbank Corporate and Investment Banking divisions under the Nedbank Group, one of South Africa’s largest banks. NPE has over 25 years of experience with successful investments in healthcare, industrials, IT, and telecoms industries and regularly adopts a co-investor finance strategy to its investments.
Mineworkers Investment Company, founded in 1995, is based in Johannesburg, South Africa. It is a prominent, black-owned private equity firm that invests in long-term cash-generative assets and stage investments. It has made over 14 investments in various sectors, including manufacturing, insurance, finance, business services, media, etc. Of these 14 investments, it has exited from 5, with 9 still ongoing.
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