General Electric, Siemens AG and private equity firm the Carlyle Group are among the bidders for South African equipment repair firm Savcio Holdings, Reuters reported. The deal could be valued as high as $500 million, Reuters estimated. Buyout firms Actis and Ethos Private Equity are looking to sell their combined controlling stake in Johannesburg-based Savcio.
(Reuters) – General Electric (GE.N), Siemens AG (SIEGn.DE) and private equity group Carlyle Group [CYL.UL] are among the bidders for South African equipment repair firm Savcio Holdings in a potential $500 million deal, a person familiar with the matter said.
Swiss engineering firm ABB Ltd (ABBN.VX) had also been involved in bidding for the Johannesburg-based company, but its current interest is unclear, said the person, who declined to be identified because the information is not yet public.
Private equity firms Actis and Ethos Private Equity are looking to sell their combined controlling stake in Savcio, as are its minority shareholders, the person said.
There has already been one round of bidding, with the second round due by early July, the person said.
Savcio has an enterprise value, or combined debt and equity, of $400 million to $500 million, the person said, making the deal a substantial one for South Africa’s growing private equity market.
ABB, Actis, Carlyle, Ethos, GE and Siemens all declined to comment.
It was not immediately clear whether any of the bidders could face competition-related hurdles.
South African regulators have been tough on big cross-border deals in the past, and unions are wary of multi-nationals, particularly U.S. companies.
CONDITIONS ON DEALS
Last month South Africa approved Wal-Mart’s (WMT.N) $2.4 billion bid for control of retailer Massmart (MSMJ.J) with conditions, although the deal went through an arduous process, with three government departments and unions lining up against Wal-Mart.
Japan’s largest paint maker, Kansai Paint (4613.T), recently won approval to take over local paint firm Freeworld Coatings (FWDJ.J), although it had to agree to a raft of conditions such as promising to sell a local unit, build a new factory and not cut jobs for three years.
Savcio provides maintenance and repairs for rotating electrical equipment and transformers in Africa, servicing the mining, steel, petrochemical and rail industries, according to its website.
It counts major miners such as Anglo American (AAL.L) and Rio Tinto (RIO.AX)(RIO.L) among its customers. It also supplies industrial materials such as wire and insulation products.
Africa is seen as an increasingly attractive investment destination, thanks to its abundant resources, fast-growing population and rising personal incomes.
Siemens said last year it aimed to invest $254 million in Africa by 2012.
Washington D.C.-based Carlyle said in March it was entering sub-Saharan Africa, targeting investments in consumer goods, financial services, agriculture and infrastructure.
Emerging markets-focused Actis and South Africa-based Ethos invested in Savcio about five years ago, according to their websites. (By David Dolan; Additional reporting by Svea Herbst-Bayliss in BOSTON and Marilyn Gerlach in FRANKFURT; editing by Ed Cropley)