South Africa is beginning to hit
the radar screens of global private equity funds, with two big
transactions, one completed the other still being negotiated,
grabbing the headlines. Bain Capital bought Edgars Consolidated
Stores (Edcon), while an Actis-led consortium raised its bid
for Alexander Forbes, Africa’s biggest independent
retirement fund administrator. The deals signal a shift towards
buyouts in South African M&A, which has tended to be
dominated by black economic empowerment transactions.
On February 8 Edcon, South
Africa’s largest retailer, accepted a R25 billion
($3.5 billion) takeover bid from US buyout firm Bain Capital.
This is South Africa’s largest deal and firmly
places the country in the private equity arena.
The Bain Capital bid came in at 51% above
Edcon’s share price, an offer that some market
participants say illustrates the premium levels firms are
willing to pay to enter this...