South African billionaire from Potchefstroom now richer than Johann Rupert

Following the sale of his Jetro Restaurant Depot business for $29.1 billion (R500 billion), South African-born billionaire Nathan “Natie” Kirsh is now wealthier than Johann Rupert. 

The deal will cement Kirsh as one of South Africa’s most successful business leaders and one of the very few who could successfully export local business models overseas. 

Kirsh holds around 70% of Jetro’s business in his own name, with members of his family holding stakes in the company as well. 

Founded in 1976, Jetro has since become a cash and carry giant, operating 166 warehouse stores across 35 American states. 

The company generated about $16 billion in revenue and $2.1 billion in earnings before interest, tax, depreciation, and amortisation last year.

Jetro functions as a sort of Costco-like business for 725,000 smaller restaurant owners and food-service operators.

After losing the fortune he had made in South Africa through Metro Cash & Carry due to a deal with Sanlam, Kirsh vowed to keep tight control of his future businesses. 

Kirsh has maintained control of Jetro and his other business ventures through private partnerships rather than through publicly listed companies, as he had in South Africa. 

He famously even said no to Warren Buffett when the “Oracle of Omaha” appeared set to take a 27% stake in the private company. 

The private nature of Kirsh and his businesses has historically made it difficult to estimate his net worth, with Forbes placing it at $7.3 billion (R121.2 billion) before the sale of Jetro. 

This is based on the estimation that Kirsh owns 70% of Jetro’s shares in his own name, which makes him the largest beneficiary of the deal by some distance. 

The sale of Jetro Restaurant Depot to Sysco for $29.1 billion (R500 billion) includes debt, and shareholders are set to receive $21.6 billion in cash and 91.5 million Sysco shares. 

As Jetro is a private business, it is difficult to accurately determine how much debt the company has. 

However, most analysts and S&P Global have said the company’s debt burden is relatively small, as the combined cash and equity (share) payments are equal to Jetro’s stated enterprise value. 

Thus, using Kirsh’s 70% shareholding in Jetro, it is estimated that he will walk away with $20.3 billion (R347.62 billion) in cash and Sysco shares. 

This will make him wealthier than Johann Rupert, whose net worth is estimated by Forbes to be $13.8 billion (R236.4 billion). 

The making of Natie Kirsh

The success of Jetro in the United States was built in South Africa, with it mimicking the successful business model Kirsh pioneered during apartheid. 

Kirsh was born on 6 January 1932 in Potchefstroom in the modern North-West Province, to two Jewish parents who immigrated to South Africa from Lithuania.

He would help his mother operate the family’s malt factory after graduating from the University of the Witwatersrand. 

Kirsh would travel to Swaziland, modern-day Eswatini, to replicate the family’s malt business, using the insurance payout from his father’s death. 

The success of the business in Eswatini would be used to buy his father’s original malt business in Potchefstroom, and he formed Kirsh Industries in 1959.

The malt business was later sold to Tiger Brands, giving Kirsh significant capital, and he knew exactly what to do with it.

In 1970, Kirsh bought South African food distributor Moshal Gevisser and spotted a gap in the market with the cash and carry model. 

Under the laws of the time, white business owners were not allowed to operate in black townships. Kirsh supplied goods to black shopkeepers who could tap into the surging informal economy. 

Moshal Gevisser would merge with Metro Cash & Carry and grow rapidly, becoming a dominant food retailer in South Africa.

Kirsh showed his knack for dealmaking by outsmarting Tiger Oats founder Rudi Frankel, a significant Metro shareholder, to gain full control of the company. 

The pyramid structure he used to take control, Kimet, was listed on the JSE in 1978, and Kirsh quickly became known as the takeover king. 

Kimet would snap up Checkers, Dion, Union Wine, and Russell’s to give Kirsh control of over 12% of all consumer goods in South Africa. 

This would not last forever, with the rising political and economic turmoil in South Africa catching up with Kirsh, with township unrest significantly impacting his business. 

To continue growing amid increased economic turmoil, Kirsh needed capital, and he turned to Sanlam’s Fred du Plessis. They would form a holding company, Sanki, in 1984, in which Kirsh had 51% and Sanlam 49%. 

This would be Kirsh’s big mistake in South Africa, with the entrepreneur signing the deal on his lawyer’s advice despite concerns about a clause that could give Sanlam control over capital increases.

Sanlam squeezed hard when Kirsh wanted to raise further capital. Kirsh could have fought them through the courts and risked the entire business, or sold it for cheap. 

Kirsh opted for the latter, selling the business and what many would consider a life’s work. He noted at the time that his decision was also impacted by the feeling that South Africa’s future looked bleak.

However, while Kirsh’s South African empire was prised from his grasp, the retail titan was quickly building an American distribution giant. 

Kirsh had visited America throughout the 1970s and launched Jetro Cash & Carry in 1976. After the fallout from the Sanlam deal, Kirsh moved to New York to focus on the American business full-time. 

Scarred by the Sanlam squeeze, Kirsh kept out of the public eye and vowed to keep control of his business interests in private partnerships, rather than publicly listed companies. 

The entrepreneur not only bounced back but also rose to new heights, with Jetro becoming immensely successful in the United States and now making him the richest South African.