Deals

Actis-led consortium pays $700m for South African electrical contractor

The emerging markets specialist has partnered with Old Mutual Investment Group to acquire energy and electrical engineering company Alstom South Africa.

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A consortium led by emerging markets private equity firm Actis has acquired energy engineering company Alstom South Africa for $700 million (€453 million, ZAR 5.16 billion).

Actis partnered with Old Mutual Investment Group, the private equity arm of international investment bank Old Mutual, to purchase the Johannesburg-based business. Alstom South Africa is partially owned by the eponymous global energy giant, Alstom. Paris-based Alstom sold the division to a group of investors in 2002 that included Rand Merchant Bank.

As a condition of the transaction, Alstom South Africa will sell back to its former parent its power service subsidiary, which provides maintenance services for turbines and generators.

Existing Alstom South Africa investors Kagiso Trust Investments, Tiso Group and an unnamed private investor will retain equity stakes in the independent company, as will existing management. Kagiso and Tiso are private investment firms that purchased a stake in Alstom South Africa under the government-sponsored Black Economic Empowerment initiative, which encourages black ownership of South African companies.

The acquisition was partially funded by debt financing provided by Nedbank.  

Actis did not release the respective equity stakes of all parties involved in the deal. However, a report in Creamer Media’s Engineering News, a South African trade publication, pegs Actis’s stake at 35 percent, Alstom South Africa’s existing black economic empowerment shareholders’ at 28 percent, Old Mutual Private Equity’s at 20 percent and management’s at 17 percent.

London-based Actis, which maintains offices in Nigeria, South Africa, Egypt and Kenya, currently owns several energy and infrastructure-related African portfolio companies, including Empower, a new venture developing transportable power generation plants in Sub-Saharan Africa, and Candax Energy, a Tunisian upstream oil and gas company.

Actis has been very active in its African portfolio of late. Within the last two weeks, the firm has announced a $49 million investment in Egyptian fast food chain Mo’men and disclosed its exit from Nigerian telecom company Starcomms.