In keeping with its aim to diversify into international markets, South African services, trading and distribution company Bidvest has acquired Irish firm Noonan for $208m. The move is the latest action in a broader restructuring effort, which saw Bidvest offload its food division last year to focus on growing more profitable business areas internationally.
Noonan offers facilities management services, including waste management and contract cleaning, to clients in Ireland and the UK, where it derives around 40 percent of its revenue. Bidvest will buy a full 100 percent stake in Noonan, as well as Noonan’s management team, from current owners Alchemy Partners, a Guernsey registered private equity firm. Alchemy Partners stands to make a profit of approximately $102m from the sale of Noonan, which it acquired in 2008 for €90m.
In a statement, Bidvest described Noonan as an attractive takeover prospect because of the potential for further expansion in Ireland and beyond. “The current dual geographic footprint [of Noonan] allows for growth optionality and expansion, not only into the significant market in the UK, but potentially into other countries in Europe as well,” it said.
Bidvest added that it anticipates the facilities management market to grow between four and 4.5 percent over the next five years, and Noonan was an attractive takeover prospect since it has carved a niche in this increasingly competitive market by focusing on serving medium-sized clients.
In the statement, CEO Lindsay Ralphs said: “Noonan has a similar foundation to that of our Bidvest Services division, which is today a formidable business. Noonan’s business model is complementary and several learnings can be shared and enhanced.”
The sale is subject to South African regulatory approval. Assuming this is issued, the effective date of the transaction will be August 31, 2017.