Metrofile Exits JSE: Digital Transformation or a Sign of the Times?
South African information and records management giant, Metrofile, is set to leave the Johannesburg Stock Exchange (JSE). In a deal announced on September 16th, the company agreed to be acquired for R3.25 ($0.19) per share by Mango Holding Corp, a Delaware-based entity backed by investors with US ties. This move raises questions about the company’s future and the broader health of the JSE.
The Deal and Its Drivers
The acquisition is being spearheaded by Mango Holding, which is supported by WndrCo, a Silicon Valley investment firm, alongside a group of high-net-worth individuals. Metrofile’s management cites the need to accelerate its digital transformation, a process initiated in 2016. The new ownership structure is expected to inject both capital and expertise, facilitating the expansion of Metrofile’s digital services across Africa and the Middle East. However, the company’s 2024 financial results reveal a concerning picture. Revenue from the South African division dipped by 3%, and operating profit experienced an 18% decrease, primarily due to reduced product sales and lower revenue generated from digital services.
The proposed sale of Metrofile highlights a concerning trend. The JSE, once a vibrant market, has seen its number of listed companies dwindle dramatically from approximately 850 in the 1990s to around 300 today, and the trend of delistings continues.
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