Bidvest Group Ltd\u2019s banking unit has agreed to buy FinGlobal, a provider of financial services to South Africans living outside the country, as part of an acquisition drive to expand and diversify its business.<\/p>\n
Bidvest Bank will fund the purchase out of its R2 billion ($142 million) in cash reserves, Managing Director Japie van Niekerk said by phone on Tuesday, without disclosing the value of the deal.<\/p>\n
The acquisition gives the lender access to Hermanus, South Africa-based FinGlobal\u2019s more than 15,000 customers in 80 countries, offering services such as tax refunds, foreign-exchange services and retirement annuities.<\/p>\n
The transaction marks Bidvest Bank\u2019s second deal in three months after buying First Data Corp.\u2019s South African e-commerce payment unit, First Data Resources, for an undisclosed sum in August. Bidvest Bank, which was born out of a foreign-exchange business its parent company bought in 1998, is seeking to broaden its customer base in an effort to take market share from South Africa\u2019s four largest lenders.<\/p>\n
\u201cWe are looking to add and diversify our revenue streams,\u201d Van Niekerk said. \u201cWe also have the ability to do one or two bigger acquisitions with the group.\u201d<\/p>\n
The lender\u2019s parent is looking for its next phase of growth after spinning off its food-services unit last year, with all businesses in Bidvest looking for large strategic acquisitions to bolster the group\u2019s portfolio, he said.<\/p>\n
Bidvest has as much as $1 billion to spend on acquisitions, Chief Executive Officer Lindsay Ralphs said earlier this year.<\/p>\n
Moody\u2019s Investors Service in June upgraded Bidvest Bank\u2019s long-term national scale rating to Aa2 even as South Africa\u2019s local-currency debt faces the risk of a downgrade to junk by the end of this year due to the country\u2019s slow economic growth, climbing debt levels and political wrangling.<\/p>\n
\u201cThere is some risk in terms of the sovereign rating, but usually in tough economic operating environments there are also opportunities,\u201d said Van Niekerk.<\/p>\n