Intertek will acquire SAI Global Assurance for cash consideration of A$855m on a cash-free and debt-free basis. Intertek will finance the acquisition using new debt facilities.
SAI Global Assurance is part of the wider SAI Global Group owned by the private equity firm Baring Private Equity Asia.
Intertek is a global market leader in Assurance solutions, enabling clients to identify and mitigate the intrinsic risk in their operations, supply and distribution chains and quality management systems.
The acquisition of SAI Global Assurance will further strengthen Intertek’s Assurance offering by providing additional scale, enhanced geographic coverage and new capabilities. Specifically, we will benefit post acquisition from a stronger market position in Australia, the USA, Canada, the UK and China, and an expanded service capability in attractive end-markets.
SAI Global Assurance utilises its globally recognised brand to mitigate risks across organisations’ processes, operations and supply chains. It provides Assurance services, including management systems certification and second party audits across a wide variety of end-markets to more than 60,000 customers in c.130 countries.
SAI Global Assurance is the market leader in assurance in Australia and has scale positions in the US, Canada and the UK and a fast-growing business in China. In addition to management systems certifications, SAI Global Assurance has a particularly strong position in the Food, Agriculture and QSR end-markets, as well as a good presence in environmental & sustainability audits.
Alongside its principal assurance activities, SAI Global Assurance provides global market access solutions offering more than 1.5 million technical standards to more than 10,000 customers in Asia Pacific, Europe and the Americas.
SAI Global Assurance is expected to record revenues of A$240m and an adjusted EBITDA margin of 23% in the financial year ending 30 June 2021
The transaction is subject to customary closing conditions and is expected to be completed in Q3 2021.
Andre Lacroix, Chief Executive Officer of Intertek, commented: “As we emerge from the global COVID-19 pandemic, we expect our customers to increase their focus on Risk-Based Quality Assurance to provide the highest quality safety and sustainability products and services to their customers. The growth of the Assurance, Testing, Inspection & Certification (ATIC) industry is expected to accelerate and Assurance, a capital light and high margin service will be critical to addressing the increased corporate focus on Total Quality Assurance.
Intertek Total Quality Assurance (TQA) provides a superior service to our clients through our end-to-end systemic ATIC solutions. With the acquisition of SAI Global Assurance, we continue to strengthen our TQA value proposition by scaling up our Assurance business in complementary geographies such as Australia and the UK.
SAI Global Assurance is a highly regarded business and brings a large, diverse, high quality customer base and strong positions in management systems certification, as well as food/agriculture and QSR audits. We believe the combined organisation will have an improved ability to deliver a superior service to customers across industries and geographies, while benefitting from operational and cost efficiencies.
We are delighted to welcome SAI Global Assurance and its management team to Intertek.”
The acquisition constitutes a Class 2 transaction pursuant to the UK Listing Rules. For the purposes of the LR 10.4.1.R (Notification of Class 2 transactions), SAI Global Assurance’s revenue and adjusted EBITDA for the year to June 2020 was A$233m and A$36m respectively. Gross assets at the end of March 2021 were A$433m.
Intertek Group plc (LON: ITRK) is a leading Total Quality Assurance provider to industries worldwide. The network of more than 1,000 laboratories and offices in more than 100 countries, delivers innovative and bespoke Assurance, Testing, Inspection and Certification solutions for customers’ operations and supply chains.
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12 May, 4:45 pm GMT+1 · Disclaimer