It was a little over 30 years ago that Apollo 11 took off from Cape Canaveral on a mission that led to man`s first step on the moon. Sadly we were deprived of the epoch-making images because, in those days, we did not have television in South Africa.
But soon, with the planned listing of healthcare insurer Discovery Health in September, we`ll be able to watch a rather different kind of lift-off and the first of its kind on the JSE.
While it is headed for the JSE`s Life Assurance sector, it is in fact the first pure healthcare insurer to go to market and will do so with a market capitalisation of close to R2,5 billion.
There`s little doubt that the public offer, which opens in late August, will be heavily oversubscribed or that the sheer scarcity value of the shares will send it well beyond the blue sky and into the stratosphere.
Of course, there`s always the risk that institutional investors will lose interest if they can`t get their hands on enough stock.
But Discovery, with its entrepreneurial owner manager culture, is bound to stimulate more interest than it can necessarily satisfy. We reckon that a fair following wind of specialist unit trusts, medical professionals, insurance brokers, clients and admirers will propel Discovery well into orbit.
We`re just sorry it`s not going to be a much larger offer, but suspect that neither FirstRand nor Discovery``s owner managers are in a hurry to give away too much of a good thing.
There must have been some interesting discussions at FirstRand`s Merchant Place headquarters on who was going to allow whom to be diluted more to let in new investors.
Adrian Gore, Discovery`s chief executive, and Barry Swartzberg, his partner in success and the chief operating officer, have an impeccable reputation in the marketplace as uncompromising businessmen. Laurie Dippenaar, FirstRand`s chief executive, knows when he`s on to a winner.
We``d have loved to be a fly on the wall for those discussions.
Discovery is a fast-growing business yet seems to make light work of maintaining its service levels in the face of growth.
Business positively pours in according to its managers. Brokers and clients tend to rave about Discovery in dinner party conversations.
And although FirstRand doesn`t really need the capital, the Discovery business will benefit from an injection of rocket propellant to send it thrusting into the next millennium.
But, far from being an unguided missile, Discovery is pursuing a very well-defined trajectory, targeting only the upper ether of the marketplace.
There`s still plenty of room for expansion in South Africa. The parlous condition of the state-run medical sector only serves to fuel the demand for the benchmark service and efficiency levels for which Discovery is known.
However, any further expansion will have to be in the developed markets of the First World where the options are somewhat narrowed by the higher level of state medical provision.
Dippenaar says Gore and his team at Discovery have already embarked on a pilot project in Chicago, injecting R50 million into a mini-Discovery in the trillion a year US healthcare industry. It`s due to swing into action half way through next year and Gore is optimistic that it will be profitable within three years. Locally, Discovery expects to report bottom-line earnings of R90 million for the year to June 30 and has pencilled in R135 million for the year to June 2000.
Discovery will be in a unique position on the JSE for the time being. The nearest thing, albeit a million miles away in its approach to business, is medical aid administrator Medscheme, which is also headed for the JSE.
Hollandia Reinsurance, which sold its 13 percent interest in April to facilitate the listing, must be chuffed with the return on its stake.
It sold on the basis of an internal valuation that put Discovery at about R1,3 billion. Since then, numerous investment bankers have talked this up to R2,5 billion - which we reckon is a tad conservative.