SAI Global process ends with no full buyout offer

A number of interested parties put forward proposals to acquire one or more of SAI's underlying businesses and these will be discussed further, the company said in a regulatory filing. However, PEP - which subsequently joined forces with KKR - did not submit a final offer despite conducting extensive due diligence.

Central to PEP's concerns was the contract SAI has with Standards Australia, a non-governmental standards development body, which accounts for the bulk of the information services revenues. This division is in turn responsible for a significant portion of SAI's overall revenues. The 15-year contract comes up for renewal in 2018 and SAI may have to settle for less lucrative terms than before.

"The company asked PEP/KKR for an indication of their valuation of the remaining businesses, which comprise the majority of the value of SAI Global. PEP/KKR declined to give any such indication, and in the absence of any valuation parameters, the SAI board determined it is not in shareholders' interests to proceed further with the consortium," the company said.

SAI was spun out from Standards Australia via an IPO in 2003. The company audits, certifies and registers products, systems and supply chains through independent assessment to help companies reduce risk and improve product and service quality. It has three business units: information services, which provides information required to comply with regulatory standards; compliance, which puts together technology-enabled business solutions and staff training; and assurance, which covers risk management, certification and related services.

SAI is headquartered in Australia and 61% of its revenues come from this market. North American customers account for 24%, with 11% coming from Europe, the Middle and Africa and 4% from other regions. The company announced a statutory net profit of A$35.3 million for 2014, up from a loss of A$43.2 million the previous year. EBITDA dropped 7.3% to A$93.3 million while revenue increased 10.3% to A$527.7 million.

PEP offered to buy all outstanding shares in SAI via a scheme of arrangement in May. SAI, said that while it was open to engaging with PEP, it would launch a formal bidding process and make information available to other prospective buyers. Last week it extended the bid deadline by four days in response to requests from interested parties.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Buyouts
• Support services
• Australasia
• professional services
• Pacific Equity Partners
• KKR
• buyout
• Australia