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UK's Intertek to buy Australia's SAI Global Assurance for $660 million

By Reuters

<p><body> <p>By Yadarisa Shabong and Kane Wu</p> <p>(Reuters) -British inspection and product testing company Intertek Group agreed on Thursday to buy <span class="caps">SAI</span> Global Assurance for A$855 million ($660 million), as it builds market share in Australia, North America, the UK and China. </p> <p><span class="caps">SAI</span> Global Assurance, which is indirectly owned by private equity firm Baring Private Equity Asia (<span class="caps">BPEA</span>), provides second-party audits to clients across 130 countries, and has a strong position in food and agriculture and also carries out environmental and sustainability audits.</p> <p>The Australia-based company’s environmental management systems helps its customers reduce energy consumption, carbon emissions and energy costs at a time when investors and corporations worldwide have become more sensitive to climate goals.</p> <p>Intertek, which provides testing, inspecting and certification to industries, said it would finance the deal using debt. </p> <p>The deal, on a cash-free and debt-free basis, is expected to add to Intertek earnings from the first year post acquisition. </p> <p><span class="caps">SAI</span> Global Assurance is expected to achieve revenues of A$240m and an adjusted earnings before interest, taxes, depreciation and amortization (<span class="caps">EBITDA</span>) margin of 23% in the financial year ending 30 June 2021, Intertek said in its announcement.</p> <p>Jefferies advised <span class="caps">BPEA</span> and <span class="caps">SAI</span> Global on the sale while Deutsche Bank advised Intertek, according to people with knowledge of the transaction. The banks did not immediately comment.</p> <p>The sale marks a partial exit for Hong Kong-based <span class="caps">BPEA</span>, which bought <span class="caps">SAI</span> Global out in 2016 for A$1 billion (https://www.reuters.com/article/sai-global-ma-baring-idUSL3N1C10LG), the people said, declining to be named as they were not authorised to speak to the media.</p> <p>Baring still owns <span class="caps">SAI</span> Global’s risks business and other smaller units and may kick off a separate sale process for the risks unit, said one of the sources.</p> <p>The private equity firm declined to comment.</p> <p>($1 = 1.2955 Australian dollars)</p> <p> (Reporting by Yadarisa Shabong in Bengaluru and Kane Wu in Hong Kong; Editing by Sherry Jacob-Phillips and Elaine Hardcastle)</p> </body></p>