Bidvest hungry for bolt-ons

WAR CHEST: BILLIONS AVAILABLE FOR ACQUISITIONS

What a big fish Bidvest has grown into, as it circles the local pond, hungry for growth here and overseas.

The next growth phase for diversified industrial group Bidvest hinges on South Africa’s political stability, with the company prowling for more deals at home and abroad.

CEO Lindsay Ralphs says Bidvest, operator of mostly South African businesses including freight services, security, cleaning, car rental and plumbing supplies, hopes for a more stable year ahead.

“When we had Nenegate and the rand jumping all over the show, it made life difficult to operate and business confidence levels dropped. The political environment is now more stable.

“The rand is now at R13 [to the dollar], which is a reasonable level. We are aware of the ANC’s elective conference coming up in December. As long as that kind of stability continues, business confidence should continue. And if confidence picks up, then the economy will pick up,” says Ralphs.

Bidvest is hungry to ramp up its investments with scale-building acquisitions in local and foreign sectors, including the UK, where it already owns a 100% stake in automotive firm Ontime Automotive and 80% in vehicle rescue recovery group Mansfield, he adds.

“We have already identified one or two deals. There is a lot of room for bolt-on acquisitions.”

Abroad, Bidvest can also raise up to R15 billion from its bank facilities.

Says Wayne McCurrie, senior portfolio manager at Ashburton Investments: “Bidvest has an extremely big balance sheet, which is positive for a big deal offshore. ”

The hunt for deals follows the unbundling and separate JSE-listing of its global foodservice business Bidcorp, which has a market capitalisation of R90 billion – nearly 40% higher than Bidvest’s (R55.3 billion).

McCurrie says the unbundling would allow Bidvest to raise its own capital for expansion rather than it shelling out large sums of capital for its food service busi- ness (now Bidcorp).

Bidvest’s interims for the six months to December 2016 on Monday showed the company reported a 3.2% rise in trading profit to R2.8 billion on the back of a 4% growth in revenue to R36 billion.