Financial Institutions

Sale of Saint-Gobain Pipelines to Kutana Steel

Verdant Capital has sold Saint Gobain Pipelines, a subsidiary of Saint Gobain in South Africa, to Kutana Steel, a wholly owned subsidiary of the Kutana Group. Saint Gobain, one of the largest 100 industrial companies in the world, is listed on the Euronext Stock Exchange and has a market capitalisation of USD 32 billion. Saint Gobain hired Verdant Capital to sell Saint-Gobain Pipelines when it ceased to be core to its business.

The Kutana Group is a South African women-owned BEE investment firm. Kutana were identified by Verdant Capital as a potential buyer following their acquisitions of similar and potentially synergious businesses from Aveng in 2016: Steeledale and E+PC Engineering and Projects. The transactions are part of a broader transformation of the industrial sector in South Africa.

Saint Gobain Pipelines is involved in the production of iron castings for industrial parts (especially into the mining services and transportation infrastructure sectors) and cookware. Its iron cookware products are supplied under the BestDuty and Chef Supreme brand names, both of which have developed strong brand value over many years. The company held a comparative advantage over competitor firms and products flowing from China in terms of both delivery times and local content requirements in certain industries e.g. valves and railways. The business was founded in 1946 as Besaans du Plessis and had been acquired by Saint Gobain in 1998.

Transaction volumes in South Africa over the last two years have been impacted by weaker macroeconomic conditions and by political uncertainty, and the knock-on impact on business confidence. Notwithstanding these headwinds, Verdant Capital structured and implemented a targeted process to achieve the client’s objectives of a clean sale.

Verdant Capital acted as sole financial advisor with respect to the sale of Saint-Gobain Pipelines. Verdant Capital has completed three cross-border M&A transactions in 2017 alone.