RMB supports Metier's strategic acquisition of Mertech Marine

Metier, through its Sustainable Capital Fund II (MSC II) has acquired Mertech Marine (Image supplied)

Metier is an independent owner-managed private equity firm with offices in Johannesburg, Mauritius, and Nairobi with representation in London.

Metier operates two parallel investment practices, the Capital Growth practice which concentrates on mid-cap entrepreneurial businesses requiring growth capital, and the Sustainable Capital practice.

The Sustainable Capital practice, which invested in Mertech Marine, focuses on investments that contribute to sustainable development in sub-Saharan Africa, including renewable energy, energy efficiency, water- and waste management.

Source: Metier. Metier director and principal, John Hannig.

Mertech Marine is a South African company specialising in the recovery, recycling, and repurposing of undersea cables.

The acquisition aligns with MSC II's focus on environmental sustainability and the circular economy, supporting their goal of investing in sectors that promote sustainability, which are crucial for driving environmental and social impact.

By acquiring an equity stake in Mertech Marine, MSC II aims to enhance its portfolio with a company that not only contributes to reducing environmental waste but also creates economic value through the recycling and repurposing of materials.

Metier director and principal, John Hannig, who led the transaction on behalf of the firm said, “We are very excited about our investment into Mertech Marine, which is a demonstration of a global leading circular-economy champion based in Africa.

"RMB has worked closely with Metier through the investment process, assisting us to navigate the commodity risk and provide an optimal financing solution for the business.”

Complex, cross-border financing

RMB played a pivotal role as debt financier for the acquisition, on the back of its longstanding relationship with Metier. The complexities of the deal required the team to lean on their expertise to ensure an optimal funding structure that meets the operational requirements of Mertech Marine and at the same time mitigates risks around the acquisition.

“This was not a leverage finance transaction in the traditional sense; we had to approach it in a similar way to a resource finance transaction due to Mertech Marine’s business operating model. We also had to understand how the potential risk associated with the financing could be mitigated in line with commodity price movements,” says Anthony Sam at RMB.

Adding to the complexity, the transaction had to be executed across multiple jurisdictions, bearing in mind the inherent risk associated with commodity prices, as well as security of supply, given that Mertech Marine extracts the cables from international waters. The acquisition also needed to be amenable to both Metier and Mertech Marine, which required a high level of flexibility to be built into the deal.

Sustainable cable recovery

To date, Mertech Marine has recovered more than 105,000km of decommissioned undersea telecommunication cables and reclaimed large quantities of copper (which is considered as a critical mineral, fundamental in the energy transition to a lower carbon emitting future), plastic and steel as a result.

These materials can be used to manufacture new goods with a significantly reduced greenhouse gas (GHG) emissions footprint compared to that of virgin sources such as mining. Independent review demonstrates a net saving in GHG emissions of approximately 2.5 tCO2e per tonne of cable recovered, leading to total avoided GHG emissions of about 50,000 tonnes in a typical year.

“RMB is committed to sustainable development in Africa, and supporting this acquisition aligns with our broader strategy to finance sustainable projects. Facilitating investments in companies like Mertech Marine, which operates in the recycling and repurposing sector, enables RMB to promote job creation, environmental sustainability, and economic growth in South Africa and the broader region.

This partnership also sets the stage for future involvement in other sustainable and infrastructure-related projects, contributing to broader economic development goals in the region,” Sam concludes.