Alstom divests South African business to Actis-led consortium for $700 million

07 August 2008

In the biggest private equity deal so far this year, London-based private equity firm Actis Capital LLP is leading a consortium of investors to acquire electrical engineering business Alstom South Africa (ASA) for 5.16 billion rand ($700 million).

The other investors in the consortium include South Africa's Old Mutual Investment Group (Pty.) Ltd., the management of Alstom South Africa and existing shareholders and South African black empowerment principal investment companies Kagiso Trust Investments Ltd. and Tiso Group Ltd.

Rand Merchant Bank, a division of First Rand Bank Limited, advised on the transaction, which was funded by a combination of debt and equity funding with Nedbank underwriting the debt component of the transaction.

Alstom said in a statement that it would participate in reshaping the shareholding of its former subsidiary Alstom South Africa, which it sold in 2002 to a group of investors.

As part of this agreement, Alstom will sell the remaining 8.1-per cent stake it held in ASA to the Actis consortium  and also increase its service offering in the region by acquiring the Johannesburg-based  wholly-owned ASA subsidiary, Alstom Power Service Pty Ltd,  which undertakes servicing, maintainance and upgrade of turbines and generators in South Africa.

Alstom will said it would also provide its services to another ASA subsidiary, Alstom John Thompson (AJT), which undertakes the upgrade and retrofit of larger boilers and environmental equipment.