US private equity firm Bain Capital agreed to buy South Africa’s biggest retailer, Edgars Consolidated Stores, for $3.5bn, in the country’s largest ever private equity transaction, Bloomberg reported on Wednesday.
In a statement to the South African stock exchange, Edgar said “although its prospects remain positive, its future performance and corresponding growth profile are not without risk.'’ Bain’s offer therefore provides shareholders “with the opportunity to realize significant value for their investment.'’
The buyout requires the approval of 75 per cent of Edgars’ shareholders, the competition authorities and South Africa’s central bank.
Edgars owns more than 900 stores in South Africa, Lesotho, Botswana, Namibia and Swaziland, and Steve Zide, managing director at Bain, said “its brands enjoy iconic status throughout the country.” Zide also told Bloomberg belief in the growth potential of the South African economy was a “significant factor” in the investment decision.
Private equity companies in South Africa made a return of 30 percent last year, besting the 27 percent achieved in the US and 24 percent in Europe, according to a survey released in May by KPMG International.
