JSE Limited, the operator of the Johannesburg Stock Exchange (JSE), has agreed to acquire Link Market Services South Africa, the second largest share registry business in South Africa, for R224.5 million.
JSE Limited will acquire a 74.85% shareholding in Link SA with Link SA’s Black Economic Empowerment (BEE) shareholder retaining the remaining 25.15%, as it aims to diversify business revenue. Link SA chief executive officer (CEO), Iqbal Haniff, will remain head of the company.
The acquisition will see Link SA being merged into the JSE Limited structure and operated independently under a newly formed business stream, subject to all required approvals.
“This proposed acquisition comes after many engagements with the JSE’s listed companies’ which have expressed a desire to drive synergies and consolidate how they service their shareholders through a one-stop-shop,” the JSE said.
It noted that the proposed transaction is revenue accretive with an expected contribution of up to 6% of group revenue, while exceeding the group’s return on investment hurdles. “This also presents opportunities for both listed and unlisted companies to use these services.”
Through Link SA, the JSE intends to introduce end-to-end products and services to JSE listed companies, making it easier for them to communicate and understand their shareholder base.
These services include shareholder register maintenance, corporate actions, shareholder analytics, managing BEE share schemes, electronic communication and voting, and training and educating shareholders.
The transaction will enable the JSE to diversify revenue and extend the services it already offers listed companies through its Company Services team, which includes training, investor relations support and listed company annual, and interim results presentations hosting and meeting support.
JSE CEO, Nicky Newton-King, said: “We are continuously having conversations with our clients on how we can better meet their needs and add value. The JSE is well placed to engage in order to fill a crucial gap in the market and to collaborate with our listed companies to educate and look after their shareholders end-to-end.
“We look forward to this transaction strengthening our relationships with our listed clients and helping to build a stronger and more engaged shareholder base for our issuers which is so important for real inclusive growth in our country.”