Bidvest has acquired 100 percent of BIC Services in Australia from private investors for Au$160 million (R1.8 billion).
“We are excited to have found a business and management team I believe can contribute to advancing Bidvest’s international growth strategy and add value to a stakeholder base that now includes Australia,” Bidvest chief executive Mpumi Madisa said yesterday.
BIC’s management team had signed service agreements and remained committed to the business.
Bidvest’s share price increased 2.38 percent to R212.52 yesterday morning.
The acquisition would be settled from the group’s international bond proceeds raised in October, 2021.
BIC, headquartered in Sydney, operates across Australia, and is a leading provider of facilities management-services across office, commercial and education sites.
Its cleaning services leverages an interactive technology solution and is augmented by a range of hygiene, waste, maintenance and other ancillary services.
BIC employs almost 2 500 people across 3 250 sites and its client base primarily comprises premium A-grade offices in New South Wales.
Over the years, BIC developed a vertically-focused, client-centric business model supported by a web-based reporting system that can be integrated into client systems and an interactive customer experience platform.
Madisa said BIC has a seasoned and commercially strong management team who have introduced innovative and enabling technology to drive value for all stakeholders.
She said the acquisition was firmly aligned to Bidvest’s strategy to expand its international presence in facilities management, as well as hygiene services and the distribution of plumbing and related products.
She said it also meets Bidvest’s acquisition criteria which are delivering a niche service with a strong innovation and sustainability underpin; being a meaningful player in its chosen niche and geographic footprint with the potential to scale further and an entrepreneurial and passionate management team, with deep industry experience.
The business also had strong cash-flow conversion supported by an annuity, contractual income stream; and attractive sustainable returns in a low-asset intensity business.
She said the acquisition would be modestly earnings and return accretive to Bidvest.
In May Bidvest released a trading update where it said the focus of the group’s international expansion strategy remained on course, with several possible corporate action opportunities at different stages. The pipeline could be completed within the current funding capacity of the group.
In the ten months to April 30 it said the strong financial year-to-date performance of the group continued in line with that reported for the six months ended December 31, 2021, saying solid growth in the contractual annuity income businesses and exceptional growth in the trading businesses had yielded impressive results.
Bidvest’s results for the financial year ending June 30 are expected to be released on September 5.
BUSINESS REPORT ONLINE