Bravura acted as transaction advisor to Microchem Specialised Lab Services (Microchem), a leading food safety testing laboratory in South Africa, in facilitating a structured disposal to a European global laboratory and testing organisation, AGQ Labs.
Microchem was established by Raymond Hartley in 2007 and subsequently developed into an independent, SANAS accredited testing laboratory. Today Microchem is a national authoritative provider of a comprehensive range of chemical and microbiological analyses and related services to the food and non-food industries.
Craig Shaw, Corporate Finance Principal at Bravura explains that this opportunity arose as a result of the main shareholder seeking to implement a gradual disposal of the business. Bravura Corporate Finance have more than two-decades of experience in maximising the value on exit for owner-managed businesses. “We are able to use our experience to run a focused process with high-conviction buyers. We believe that our proficiency in managing a variety of challenges that may occur, means that we are able to offer innovative solutions to our clients.”
“The nature of our business lends itself to being customer-centric with strong relationships built over a long period,” says Raymond Hartley, Managing Director: Microchem. “We continually strive to be the most advanced chemical and microbiological laboratories in Africa in order to stay ahead of the competition and keep on delivering solutions for clients. The Bravura team took the time to understand the business, and what would serve us best, before looking for an international partner to help us unlock further opportunities.”
Bravura was instrumental, through careful and methodical global engagement, in finding the right international partner in AGQ Labs. AGQ Labs operates a global network of laboratories in countries such as Spain, Italy, Morocco, the United States, Saudi Arabia, the Dominican Republic and parts of South America. The AGQ Labs business is renowned for providing sustainable solutions and value-added services across a diverse range of sectors; from agriculture through to food, energy and Water Cycle management.
After the acquisition, Microchem will benefit from AGQ Labs’ extensive expertise and innovative solutions, further enhancing their service offerings.
Wouter Bezuidenhout, Bravura Corporate Finance Analyst says: “This project was a great transaction to be a part of, and I am proud that we could introduce a strategic investor like AGQ that believes in the growth possibilities of Microchem.”
The Bravura Corporate Finance team was able to navigate complex corporate and transaction structures to ensure that all parties achieved the best possible outcome. This enabled the gradual exit for the founders through the transaction structure. Our contribution ranged from origination to execution, enabling AGQ Labs and Microchem to seamlessly continue with their operations with minimal interruptions. Bravura takes pride in our holistic role, enabling the business to enhance and focus on its operational capacity and contribute to the further development of quality laboratories in Southern Africa.
Soria Hay, Head of Bravura Corporate Finance, says that this was a win-win transaction for both the buyer and the sellers. “We understand the intricacies of medium sized businesses, and are committed to the delivery of excellent outcomes that aim to surpass expectations. We were able to solicit 7 offers for the business, 5 from international industry parties. This allowed for good valuation metrics and an optimal outcome for the Microchem shareholders.”
The transaction closed in June 2024.
