Karooooo CEO Zak Calisto is selling R1.3bn worth of shares in the technology group he founded in a secondary public offering.
On Thursday, the Cartrack owner announced the pricing of an underwritten secondary public offering of 1.5-million ordinary shares held by Calisto at a price of $50 per share for total gross proceeds of about $75m (R1.34bn).
The offering is expected to close on June 13, subject to customary closing conditions. In addition, the underwriters of the offering will have a 30-day option to purchase an additional 225,000 shares at the same $50 price.
Once the transaction is complete, the Karooooo boss will still be the group’s largest shareholder, holding 58% of its issued share capital, translating to 17.9-million shares. If the underwriters choose to exercise their option to acquire the additional equity, this will leave Calisto with 57.27% of the group.
The founder has a mechanism in place that ensures his control of the group, working in concert with Juan Marais, chief sales officer of Karooooo. He holds 10.52% of Karooooo through a company called One Spire.
Essentially, Calisto and his sales chief have agreed that if the former’s beneficial ownership falls to below 51%, then One Spire will cast all votes as directed by Calisto.
The group, founded by Calisto in 2004 and listed on the JSE and Nasdaq, specialises in vehicle tracking, fleet management, logistics and software solutions.
In 2021, Karooooo raised $33.8m through a Nasdaq listing, effectively moving its primary listing from the JSE. The complex deal was done to open Karooooo up to larger pools of capital on offer in the US market, with the group having felt undervalued on the local exchange.
Karooooo says it is not selling any shares as part of the offering and will not receive any of the proceeds, but will bear the costs associated with the sale, other than any underwriting commissions, which will be borne by Calisto.
UBS Investment Bank, William Blair and Standard Bank are acting as joint lead book-running managers for the offering.
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