HoldsportA strategic investment into South Africa’s leading sporting and outdoor retail group, delivering operational growth and impact.
Essentials
  • Fund: OMPE Fund V
  • Sector: Retail
  • Geography: South Africa
  • Origination: Proprietary
  • Economic Interest: 87.2%
  • Date of Acquisition: March 2025
  • Date Of Exit: May 2025
Key Peformance Metrics
  • Holdsport has exhibited strong performance since its acquisition, driven by healthy topline growth, GP margin stability, and good cost control
  • The business has made good traction on its store rollout strategy (via a smaller store format), with the number of stores opened since the acquisition exceeding expectations
  • Grew EBITDA at 12% CAGR
  • Increased EBITDA margin to 18.4% from 18.2%
  • Decreased Net Debt/EBITDA to 1.2x from 2.1x

Holdsport is a diversified business operating across retail, wholesale, manufacturing, distribution, and e-commerce, focused on the sport, outdoor, and recreation sectors across South Africa and Namibia. It is home to Sportsmans Warehouse, the leading elevated sporting goods chain in the region, and Outdoor Warehouse, an outdoor, camping, hiking, and adventure retailer. It also owns Shelflife, South Africa’s premium sneaker and streetwear store.

With a total of 88 stores across South Africa and Namibia and a rapidly growing e-commerce platform, Holdsport has well-established relationships with major international brands, including Nike, adidas, Asics, Hoka, and Garmin, supported by their own brand portfolio, including First Ascent, Cape Storm, and OTG.

What was the investment opportunity?
  • Old Mutual Private Equity (OMPE) identified Long4Life (L4L) as a potential delisting opportunity shortly after the company announced a strategic review to assess options to unlock value for its shareholders. Due to its small market capitalisation, limited institutional coverage, and lower trading liquidity, L4L historically traded at a notable discount compared to its sum-of-the-parts valuation. Additionally, its holding company structure and substantial head office costs contributed to a consistent decline in share price since its listing in 2017.
  • Most of the businesses within L4L (particularly Holdsport and Chill & Inhle Beverages) were well known to OMPE, given that we had historically assessed them when they were previously sold in the private market. This strong degree of knowledge and familiarity with the L4L portfolio allowed us to move very quickly from our first evaluation of the delisting opportunity to making a binding offer to shareholders, followed by a firm, fully-funded offer within a period of circa four months.
What was the investment rationale?
  • Investment in a quality asset, alongside management who are significantly invested. Holdsport operates in a distinct niche in the retail sports and leisure market, where it has an entrenched market position.
  • The broader health and wellness theme provided a structural underpinning to the investment thesis, which was accelerated by the COVID-19 crisis.
  • Holdsport has a strong track record of stable, consistent growth and is an attractive LBO candidate.
  • Highly attractive entry price, which, coupled with Holdsport’s strong cash generation, provided an attractive cash yield underpin.
  • Potential for significant upside from multiple arbitrage.
How we grew and transformed the business
  • Strengthened the finance team, including the appointment of a new CFO in October 2022;
  • Continuously acted as a strategic sounding board for management on strategic decisions, including support around M&A opportunities, new potential agencies, and the store rollout programme. Initiated and supported small store format rollout across various geographies, which proved to be very successful;
  • Enhanced corporate governance processes through continued focus and commitment, by introducing various Board subcommittees and other structures;
  • Designed and implemented a management incentive scheme to retain and incentivise management, and to further align management with OMPE;
  • Worked closely with the CEO in reorganising and enhancing the effectiveness of the management and organisational structure, including developing a detailed succession plan;
  • Designed and structured an appropriate debt package for the business, working closely with the CFO and lenders to optimise the treasury function;
  • OMPE Fund V’s ownership credentials enhanced BEE credentials at Performance Brands; and
  • Assisted management with its ESG strategy via the Social, Ethics, and Transformation Committee, including:
    • providing interest-free loans to Performance Brands’ CMT network, which consists primarily of black-women owned SMME businesses. These loans were used to purchase power generators to protect businesses during times of loadshedding.
    • installing a 150 kWH solar PV system at the Holdsport Distribution Centre, of which the panels generate 80 - 90% of the electricity required under optimal daylight conditions to power the centre’s operations, thereby reducing dependence on traditional energy sources;
    • Installing alternative power solutions across the entire store footprint and working with Performance Brands and the retail stores to incorporate energy-saving LED lights with remote access control;
    • minimising paper consumption significantly by converting reports, reconciliations, and workbooks to digital formats, and by boosting the use of digital advertising; and
    • shifting to paper bags from plastic, and where plastic bags are used, these are now fully recyclable.
Exit

OMPE exited Holdsport to LSE-listed Frasers Group.