South Africa's Brait eyes $1.2bln float of bottle maker: sources - CNBC Africa

South Africa's Brait eyes $1.2bln float of bottle maker: sources

Southern Africa

by Reuters 0

Consol is the leading glass packaging manufacturer in Southern Africa. Photo:

South African investment firm Brait is preparing to float glass bottle maker Consol, in a deal which could value the company at around $1.2 billion, two sources familiar with the matter said on Thursday.

Goldman Sachs and BofA Merrill Lynch are working on the listing, along with South African banks RMB and Standard Bank, who will market the deal to domestic investors, the sources said.

The flotation of the Johannesburg-headquartered business is likely to come in the third quarter of next year, one of the sources added, cautioning that no deal was certain.

Goldman Sachs, BofA Merrill Lynch and Standard Bank declined to comment. Brait and RMB did not immediately respond to requests for comment.

Consol is the leading glass packaging manufacturer in Southern Africa, producing everything from wine and beer bottles to mayonnaise jars, according to its website.

Brait, which bought UK clothing retailer New Look earlier this year in a $1.2 billion deal, has owned Consol since it led a consortium to delist the company in 2007.

Consol has core earnings (EBITDA) of around 1.5 billion South African rand ($105.81 million) and could fetch around 12 times that, one of the sources said, noting that the ongoing weakness of the South African rand could depress valuations.

Although the unit could be sold, the buyer list for the asset is thin, they added.

In June, private equity firm Apollo won an auction for Verallia, the glass bottle unit of Saint Gobain. That deal valued the business at an earnings multiple of 7.4 times EBITDA and 12.8 times EBIT.

A listing of Consol would be a sizeable transaction for the Johannesburg Stock Exchange, which has seen six initial public offerings (IPOs) this year raising $305.7 million, according to Thomson Reuters data.

Brait, which is also listed in Luxembourg, is controlled by South African billionaire Christo Wiese.

The vehicle has been on something of an acquisition spree of late. In April it spent $1 billion on a controlling stake in gym group Virgin Active, which was jointly owned by entrepreneur Richard Branson's Virgin Group and buyout firm CVC. Other assets include British frozen food supermarket Iceland.