SAI Global put assurances operation up for sale

SAI Global’s move to sell its assurances operation comes after an admission it’s not been performing as expected.

SAI Global CEO Peter Mullins

Compliance services provider SAI Global has put its assurances operation on the auction block after it received numerous approaches from suitors.

The move follows an admission in May the assurance arm was not performing as expected, which led the group to lower its full-year trading guidance.

It also comes on the back of a failed sales process in 2014, with Bureau Veritas, SGS and Intertek tagged as interested onlookers at the time.

The ASX-listed group (SAI) said it has held meeting with “leading global sector participants” and a completed deal would allow it to shift more attention to its higher margin operations.

“A successful sale of the assurance business will support SAI’s strategy to focus its globally integrated risk management solutions business towards higher margin, higher growth software and digital products and services,” SAI Global said.

“While assurance is a valuable business to SAI Global, it would require broader geographic coverage and scale in order to be even more competitive. Moreover, at present, the industry is undergoing rapid consolidation.”

The assurance arm services clients in 120 countries, with any deal to offload it expected to include an alliance agreement that would allow SAI Global to offer assurance products and services through its risk management solutions business.

“The strategic review is at a preliminary stage and there is no certainty that these discussions will result in a transaction,” the group added.

SAI Global is being counselled by Greenhill on the potential deal and has retained Credit Suisse as advisers to the board.

At 10.10am (AEST), shares in the group rose 1.9 per cent to $3.85.