Following the acquisition of the 3.8 millionaccount portfolio, which is expected to close by the end of the year, Absa will provide retail credit and other services to Edcon customers. Edcon, meanwhile, will be responsible for managing sales and marketing for the unit, as well as handling customer service and collections, according to the press release announcing the deal.
“This is a significant addition to our retail finance offering,” Absa Group and Barclays Africa chief executive Maria Ramos said in a statement contained in the release. “Unsecured lending is a key market for Absa to channel capital into underserved communities, while adhering to responsible lending practices in the best interests of our customers and the bank. Our relationship with Edcon significantly strengthens our presence in this space.”
Johannesburg-based Edconwhose 1,167 stores make it South Africa’s largest nonfood retaileris owned by Bain Capital. Bain acquired the company five years ago for $3.5 billion in South Africa’s largest-ever leveraged buyout. (Barclays and its Absa Capital unit provided debt financing for that transaction.)
Three firms are advising on the Edcon side of the deal: Kirkland & Ellis, Sidley Austin, and South Africa’s Werksmans. Kirkland’s team on the matter, which is providing outside counsel to both Edcon and Bain, is being led by London-based partner Neel Sachdev. Sachdev has previously represented Bain on several transactions, including the Boston-based private equity firm’s 2007 purchase of Edcon. The Sidley team is being led by Washington, D.C.based partner David Teitelbaum and Chicago-based partner Willis Buck Jr. Information about the Werkmans attorneys working on the deal was not immediately available.
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