PEP, KKR bid for SAI Global falls through

The Australian firm has withdrawn itself from the market as ‘no compelling transaction arises’

Australian compliance business SAI Global has decided to halt its process of looking for a buyer, which will including the firm declining a proposal from Pacific Equity Partners and Kohlberg Kravis Roberts to buy out the company, according to a statement on the Australian Stock Exchange.

“While the process was exhaustive and very time consuming for management, it was clearly in shareholders’ interests to ascertain whether any of the proposals put forward could be developed to deliver certain and superior value for the company’s shareholders, compared to current operations,” SAI executive chairman, Andrew Dutton, said in the statement.

“SAI has invested substantial amounts of board, management and specialist advisor time to provide all possible assistance to the various parties over the past 20 weeks. In the absence of any compelling proposals, it is clearly now time for the company to return its focus to its own plans for growth.”

Australian private equity fund PEP had originally made a A$1.1 billion ($960 million; €757 million) for the business offer in May this year, which was rejected by the SAI board. KKR then joined PEP in July, the firms expected to make a improved bid for the business.

However, in September, SAI said that while no final whole-of-company proposals from PEP or other parties had been completed, it was looking to progress a number of other proposals to acquire one or more of its underlying businesses. These discussions have now been abandoned.

SAI is an ASX-listed business, focusing on providing information services, risk management and compliance to companies globally.

The business had terminated the contract of chief executive Stephen Porges in May due to his differences with the board.

While the company will not be accepting any takeover offers, “The process did generate constructive discussions and provided the basis for a thorough evaluation and validation of our strategy, including the current programme of cost reduction initiatives in our businesses. These discussions identified a range of additional opportunities to drive enhanced operational performance,” Dutton added.

PEP and KKR did not respond to requests for comment before press time.