South African glassmaker Consol intends to float on the Johannesburg bourse, it said on Thursday, a deal that could fetch around $2 billion and will mark its return to the market after more than a decade in the hands of private equity groups. No date has been set for the flotation, which comes amid growing confidence among business leaders and investors that President Cyril Ramaphosa will follow through on his promises to revive the economy and bring policy certainty.
Private equity investors led by Brait bought Consol for 6.1 billion rand ($512 million) in 2007. They ditched its private equity ownership model by issuing shares to the public four year later. "Our development plans are for aggressive growth locally and through the rest of the African continent," Chief Executive Mike Arnold said. Arnold said he expected volumes in South Africa, where the company's four factories contribute most to its bottom line, to grow by 3 to 4 percent per year until 2021.
Consol is also building a factory in Ethiopia, which it expects to complete in the fourth quarter to initially add 40,000 tonnes to raise its annual output to 972,000 tonnes. The company, which also operates in Kenya and Nigeria, reported a 1.6 billion rand ($134 million) in core EBITDA earnings in the year to June 30, 2017, and the public offer could fetch between 12 and 15 times that figure, bankers said.
Arnold declined to comment on the targeted valuation. Consol, which counts blue chips such as Anheuser-Busch InBev, Diageo and Heineken among its customers, said the listing would allow shareholders to cash in on their 11-year investment in the company and raise money to pay down debt. 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. Other shareholders are the private equity arms of financial conglomerates Old Mutual and Sanlam and the state pension fund, Public Investment Corporation.