Medu Capital, a private BEE equity investment company, is buying one of South Africa’s largest book chains, Exclusive Books.
Medu Capital, which is leading a consortium of buyers in the R435 million purchase from Times Media Group (TMG), was founded in 2003 by Ernest January and Nhlanganiso Mkwanazi.
It started with a R250 million private equity fund and set up a second R900 million fund.
It announced its third private fund last year, which had a $300 million (R3 billion) target.
The consortium includes former Exclusive Books CEO Benjamin Trisk and businessman Mark Barnes.
Included in the sale is Van Schaik, which supplies academic and reference books.
The book industry has been dented by the introduction of e-book and digital platforms, which often provide books faster and more cheaply than bookshops.
“Digitisation will prove a mixed blessing for the book industry in the near term … Although e-book sales will rise, physical bookstores will continue to close,” according to PricewaterhouseCoopers’ global media outlook 2013-2017 report.
Even when local book retailers finally make it online, they are still not on a level playing field because VAT is not charged on foreign e-book sellers.
Finance Minister Pravin Gordhan announced that foreign sellers of e-books, music, and other digital goods and services would be required to register as VAT vendors.
The deal is in line with TMG’s strategy to focus on its core media assets.
Exclusive Books has 39 stores listed on its website.
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