Bidvest Group is seeking deals outside its South African home market and could borrow as much as $1-billion for acquisitions after it spun off its food services unit last year, its CEO said.

Lindsay Ralphs, the CEO, is plotting Bidvest’s next phase of growth after the Johannesburg-based company spun off Bid Corp, which is about 40% larger by market capitalisation at R80-billion. Now, operating a mix of mostly South African businesses ranging from cleaning, security and freight services to car rental and plumbing supplies, Bidvest sees its scope for local acquisitions as limited, the CEO said.

There are a “couple of processes taking place” related to potential acquisitions, with expansion in the UK a possibility, Ralphs, 61, said in an interview at Bloomberg’s Johannesburg office on January 24. Any deal would be in an industry in which Bidvest already operated and the company would want to be a major competitor in any new market, he said.

“It probably reduces down to three, four or five significant industries that are simple and sometimes even below the radar,” said Ralphs.

Money would be borrowed outside South Africa, with overseas purchases serving to hedge against volatility in the rand, he said. The currency lost 45% of its value against the dollar in the three years through 2015 before gaining 13% last year.

Other South African companies are expanding in international markets to counter an unpredictable local currency and 2016 economic growth that the central bank said was likely to have been the slowest in seven years. Clothing retailer The Foschini Group and investment company Brait SE have bought firms in the UK, while Bid Corp and auto-to-logistics firm Imperial Holdings have substantial foreign operations.

The spin-off has been a success for the new Bidvest, Ralphs said. Previously, cash generated by the company was largely put toward growing the food services unit. The split frees up funds for growing the remaining businesses. Bidvest may also tap cash through the disposal of noncore assets, such as its Namibian fishing unit.

Ralphs replaced Brian Joffe, who founded the company in 1988 and retired as CEO when Bid Corp was separated in May. Joffe remains a nonexecutive director of Bidvest and is chairperson of Bid Corp.

After adjusting historical pricing to reflect the spin-off, Bidvest gained 63% in the past 12 months, according to data compiled by Bloomberg, making it the third-best performer on the FTSE/JSE Top40 Index and the top nonmining stock. Without the historical adjustment, Bidvest has declined 49%.

Some noncore assets, such as its properties, are strategic and Bidvest would not readily sell those. It also probably makes sense for Bidvest to hold on to Adcock Ingram Holding for now, Ralphs said. Bidvest thwarted a takeover attempt of Adcock by CFR Pharmaceuticals, of Chile, in 2014 when it built a 34.5% stake in South Africa’s biggest maker of hospital products. It has since increased that to 37.5%.

While Bidvest “paid a lot” for Adcock, it does not yet need money from a sale of the stake, Ralphs said. “Adcock used to be a gem many, many years ago and has the potential to become a gem again.”