Sabvest Capital might be the JSE’s second-oldest investment company after sector doyen Remgro, but after nearly four decades there is nothing to suggest a mature mellowness.
In fact, Sabvest, listed in the late 1980s and still headed by Christopher Seabrooke, has just seen a bout of significant dealmaking — transactions that point to possibly even larger permutations across the portfolio.
This dealmaking enhances mostly unlisted positions, investments that cannot be accessed other than through Sabvest. This affords shareholders a rare opportunity to participate in a long-term investment model that has scalable niches, diversity and a reassuring cash flow underpin.
The market pronouncement is starkly different for an investment holding company with a narrow discount to NAV, despite Sabvest not being quite as rambling or detailed when it comes to commenting on underlying operations as sector peers Hosken Consolidated Investments (HCI), Remgro and Brait.
For the record, at the close of the six months to end-June Sabvest reflected NAV of R169.40 — up only 5% but off a strong gain in the comparative interim period. With the share at R152 at the time of writing, the market is placing a discount of about 10% on the latest NAV.
The discount is a respectful sliver compared with the derisory discounts of between 30% and 50% at Remgro, Reinet, Brait, Brimstone and HCI.
While the past few years have been eventful, Sabvest also has a long-term pedigree to support the market rating. In his commentary on the interim numbers, Seabrooke points out that the 20-year compound annual growth rate (CAGR) in NAV per share for the 2025 year-end was a sprightly 19.2%, and 20.2% with dividends added back in. The share price is up 20% on a CAGR basis.
For the very long-term backers, it’s been a hugely rewarding three decades, given that Sabvest traded as low as 124c in 1996.
What has counted in Sabvest’s favour is consistency in its investment strategy, which largely revolves around the partnership principle. The company has partnered with mainly unlisted, cash-generative ventures that can be scaled up in their various niches. There have obviously been a few dud investments over the past 25 years, but none that buckled NAV. Sabvest has mostly managed to clean up and exit underperforming investments sans trauma.
But its winners — which have included the enduring industrial textile business SA Bias Industries and, more recently, industrial conglomerate Apex Partners Holdings* — have moved the NAV needle convincingly and sustained reassuring dividend flows to fund new investments and bolster existing portfolio positions.
Consequently, Sabvest now finds itself in the enviable position of probably being the only investment company on the JSE not prone to persistent pestering from its shareholders around unlocking value.
Naturally, value creation tends to mute calls for any radical portfolio restructuring, and a couple of significant new deals clinched after the interim period underline management’s determination to bolster Sabvest’s strategic silos.
Sabvest reduced its stake in specialist labelling business ITL Holdings from 34.6% to 30% but significantly expanded the company through the acquisition of Sweden-based Rudholm Group, a supplier of packaging, labelling, trims and digital solutions to the apparel and footwear sector.
It was whispered last year that Sabvest was looking at listed Swedish label-maker Nilörn, recently acquired by Trimco. Quite possibly Sabvest’s engagement with bankers and corporate advisers shook out the Rudholm opportunity.
The Rudholm acquisition, value undisclosed, will be settled in cash and by the issue of new ITL shares. And it should not be seen as a second prize. Importantly, according to the deal, the Wollin family, which founded Rudholm, and company management will take an 11% stake in the enlarged ITL. Having a vendor retaining a significant slug of the enlarged business speaks volumes about prospects.
Seabrooke is more than happy with a smaller stake in a larger international group, pointing out that there is virtually no customer overlap between the two companies. “Rudholm does not manufacture most of its own products. ITL has spare capacity, so rationalisation benefits should accrue over the next 18 months.”
He also highlights the deal terms, stressing that the Wollin family insisted on reinvesting in the new group. “So, we bought [Rudholm] at a lower multiple than we allowed the family to come in at.”
For the record, Sabvest values its holding in ITL — which has operations in the US, Canada, the UK, Germany, China, India, Indonesia, Vietnam, Sri Lanka, Bangladesh, Hong Kong, Türkiye, Mauritius, Madagascar and South Africa — at nine times ebitda. By comparison, Avery Dennison, a global market leader in labels and retail tags, has an ebitda multiple that has varied between 11 and 16.5 times in recent years.
Seabrooke says ITL has recovered in most markets, with the group delivering a strong first half in 2026 with robust revenues and profitability. “ITL remains well positioned strategically, geographically and operationally relative to its competitors, and has initiated an acquisition strategy to further enhance global positioning and growth.”
A slightly more contentious transaction, announced days after the release of the interim numbers, involves Sabvest undertaking to subscribe for new shares in a recapitalisation effort at fibreoptic network operator Frogfoot and internet services provider Vox for R754m. This is a chunky commitment considering Sabvest’s market value of R5.7bn and secures a direct interest of 8.97% in Frogfoot and Vox. Sabvest is part of a consortium headed by DNI that will hold a commanding 34.8% take. Sabvest holds a 19.4% stake (worth R970m) in DNI, whose subsidiaries offer technology and distribution services to the telecommunications, retail, banking and other sectors.
DNI has been a stout performer for Sabvest, though interim dividends were down to R43m from R45m in 2025.
The move into fibreoptics via Frogfoot might seem a less obvious fit. Some commentators have highlighted that Vox and Frogfoot ran a R256m after-tax loss and reflected negative NAV of R665m in the year to end-August 2025, but have been awarded a post-recapitalisation after-debt NAV of more than R8bn. Prospects hinge to a large degree on Frogfoot successfully competing for territory in the sprawling lower-income household market.
The fibreoptic service providers have largely tapped the business and wealthier suburban markets, leaving the underserviced lower-LSM markets as the final growth frontier. The big dog in this fight is the much larger and (now) well-capitalised Remgro subsidiary Maziv, whose initial forays into this market will be disclosed in some detail in the upcoming final results.
Seabrooke, however, believes that Frogfoot will more than hold its own. “We had a comprehensive due diligence on the operational aspects of the rollout … and we think it is going to have a competitive advantage in the rollout.”
He concedes that the lower-LSM market thrust requires “quite a lot” of capital expenditure. “But you spend and it’s over with. The renewal capital is minimal and then the cash flow just generates. We are expecting a quite strong and fairly quick cash flow out of Frogfoot, notwithstanding the rollout into lower-income areas.”
What will be intriguing to monitor over the next year is whether DNI, as an influential shareholder in Vox and Frogfoot, helps to initiate more dealmaking. It seems reasonable to assume the acquisition of one or two smaller operators in the fibreoptic field. Frogfoot now ranks as the fourth-largest fibre network operator in South Africa.
SmallTalkDaily analyst Anthony Clark reckons the new investment in Vox and Frogfoot could hint at greater consolidation for the telco business, perhaps as a stepping stone towards a substantially larger fintech transaction in the next 12 to 18 months. “The Vox and Frogfoot transaction could be a defining moment in pivoting DNI into the greater fintech arena.”
Sabvest might also look forward to seeing some action at its 40.6%-owned industrial subsidiary Apex, which it values at R1.82bn. Sabvest reports that Apex, which invests in businesses that service the mining and power-generation markets, performed strongly in the interim period, and vigorous growth is projected to continue.
Sabvest, using an ebitda multiple of 5.5, infers a total value of about R4.5bn on Apex, which is larger than JSE-listed Invicta Holdings (R3bn) and edging towards industrial market doyen Hudaco Industries (R5.7bn). These listed competitors trade on trailing earnings multiples of 6.5 and eight respectively.
Sabvest notes that Apex’s balance sheet is strong with material cash balances. Under the circumstances, there might have been expectations for a special dividend. Apex CEO Charles Pettit confirms that a special dividend was considered but says the group wants to retain flexibility. “We are investing heavily in our existing portfolio — in particular new facilities at both ELB and CBZ, and ongoing international expansion at DRA.”
Of course, holding on to cash will fuel speculation of more acquisitions at Apex, given that the group recently snagged a significant minority position at construction group Stefanutti Stocks.
Pettit says Apex is always looking at new deals. “There is nothing imminent, but we know the type of businesses we want to own. We are opportunistic, so will move quickly when we are able to buy them at the right price.”
* Sabvest is a major shareholder in Apex Partners, which is the controlling shareholder of The Financial Mail Group
