Johannesburg - Bidvest Group is seeking deals outside its South African home market and could borrow as much as $1 billion for acquisitions after it spun off its food-services unit last year, its chief executive officer said.
Lindsay Ralphs, the CEO, is plotting Bidvest’s next phase of growth after the Johannesburg-based company spun off Bid Corp, which is about 40 percent larger by market capitalization at 80 billion rand ($6 billion). Now operating a mix of mostly South African businesses ranging from cleaning, security and freight-services to car rental and plumbing supplies, Bidvest sees its scope for local acquisitions as limited, the CEO said.
There are a “couple of processes taking place” related to potential acquisitions, with expansion in the UK a possibility, Ralphs, 61, said in an interview at Bloomberg’s Johannesburg office on Tuesday. Any deal would be in an industry in which Bidvest already operates and the company would want to be a major competitor in any new market, he said.
“It probably reduces down to three, four or five significant industries that are simple and sometimes even below the radar,” said Ralphs. Money would be borrowed outside South Africa, with overseas purchases serving to hedge against volatility in the rand, he said. The currency lost 45 percent of its value against the dollar in the three years through 2015 before gaining 13 percent last year.