20 May 2015 by defenceWeb
African Equity Empowerment Investments Limited (former Sekunjalo Investment Ltd) has acquired 25% of Saab Grintek Defence for R120 million, and will dispose of its 5% shareholding in parent company Saab South Africa for R20 million.
AEEI Newco, set up specifically for the transaction and 60% owned by AEEI, will acquire the stake in Saab Grintek Defence (SGD). It will retain at least 51% black ownership status as long as it is a shareholder in SGD.
The effective date of the acquisition will be no later than 26 June this year, according to a Johannesburg Stock Exchange (JSE) notice.
“We are proud to have AEEI as a strategic partner and we see this agreement as further strengthening our commitment to the industrial growth and prosperity of South Africa at the same time supporting our endeavours to supply security solutions in Africa,” said Leif Karlsson, Acting CEO of Saab Grintek Defence.
CEO of AEEI, Khalid Abdulla said, “It has always been part of the company’s growth strategy to become an empowerment partner of choice to multinationals due to our credibility, expertise and credentials built up over the years. We are exceptionally proud to have increased our stake within the Saab Group through SGD.
“This additional acquisition is an important breakthrough for both AEEI and Saab for its growth plans within South Africa, Africa and abroad by adding value, creating jobs, alleviating poverty and finding solutions in the global market.”
“We are confident that our investment in Saab will open many more doors for opportunities across the continent, the globe and especially BRICS, with the prospect of further exploring AEEI and Saab’s capabilities in the technology sectors and in new markets,” said Abdulla.
Saab Grintek Defence specialises in areas that include electronic warfare systems, sensor technology, command and control, training systems, avionics, security and support solutions. As the export market represents almost 75% of the South African company’s total turnover, Saab Grintek Defence was awarded the Best Exporter Award by the SA Premier Business Awards in 2013 and 2014.
One of SGD’s main sources of turnover is the Integrated Defensive Aids Suite (IDAS), which has done well in India, where it is being fitted onto the Air Force and Army’s Dhruv Advanced Light Helicopters. SGD also developed and are producing the LEDS self-protection system for land vehicles.
SGD in March announced R940 million in follow-on orders from India for Integrated Defensive Aids Suites (IDAS) for the Indian Army and Air Force’s Dhruv helicopters. Deliveries will take place between 2015 and 2018. The most recent orders are by far the largest from HAL, the helicopter’s manufacturer, as the company speeds up production.
SGD is tasked with producing some of the microwave components for the antennas and electronic warfare components of the Gripen fighter jet for the international market and is currently assembling these parts for the current generation Gripen at its facilities in Centurion outside Pretoria. As one of Saab’s microwave production houses, this provides a lot of business for Saab Grintek Defence and accounts for around 8% of sales.
The company today has turnover in excess of a billion rand a year and employs 700-800 people. 80-90% of this revenue is from foreign orders.