Premier Group Buys South Africa Food, Drinks Peer Rfg Holdings

Premier offers breadstuff brands for illustration Blue Ribbon and BB Bread. Credit: New Africa/Shutterstock.com

Premier Group has announced plans to get chap South African nutrient shaper RFG Holdings successful a share-swap deal.

Owners of RFG banal will get 1 Premier stock for each 7 they hold.

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This connection equates to a 35.6% premium complete nan closing prices and a 37.5% premium supra nan 30-day volume-weighted mean prices for Premier and RFG shares arsenic of 14 October.

The switch ratio draws from a reference value of R22 per RFG stock and R154 per Premier share.

Upon woody completion, RFG will delist from nan Johannesburg Stock Exchange (JSE).

RFG shareholders will collectively clasp astir 22.5% of nan expanded Premier Group.

RFG’s elder guidance will clasp their positions, overseeing RFG activities nether Premier to support manufacturing and customer service.

Established successful 1824 and pinch its guidelines successful Midrand, Premier operates 2 units.

These units are Millbake, handling bread, maize, and wheat items; and Groceries and International, covering sweetener sweets, family and individual attraction goods, positive accommodation successful Mozambique.

The institution offers 38 user brands and backstage labels. Key brands see Blue Ribbon, BB Bread, Snowflake, Iwisa, Super Sun, Nyala, Manhattan’s, Lil-Lets, and Dove.

The cognition includes 30 mills, bakeries, and factories, backed by 28 depots successful South Africa, Mozambique, Eswatini, and Lesotho, pinch exports reaching 41 nations.

Set up successful 1896 successful Groot Drakenstein, Western Cape, RFG runs 14 plants successful South Africa and Eswatini.

The institution specialises successful ready-to-eat repast options for buyers successful South Africa, sub-Saharan Africa, and different world markets.

Its brands – Rhodes, Bull Brand, Magpie, Today, Mama’s Pies, Squish, and Hinds –alongside backstage labels are supplied to each “major” South African and overseas clients.

Primary export destinations screen nan UK, Europe, nan US, and nan Far East, alongside 13 different sub-Saharan African markets.

Kobus Gertenbach, Premier’s main executive, stated nan woody allows shareholders from some firms to subordinate nan maturation of nan mixed entity, which will nutrient yearly gross nearing R28bn ($1.6bn) and after-tax profit of R1.7bn.

The move will besides assistance Premier’s free float connected nan JSE, improving stock liquidity, according to a associated connection by nan firms coming (16 October).

Gertenbach noted: “RFG is simply a highly charismatic acquisition opportunity for Premier, pinch its market-leading position successful convenience repast solutions, beardown marketplace stock positions crossed cardinal merchandise categories and its portfolio of well-established brands.”

He called RFG a “complementary” summation to Premier, pinch “limited integration risk”.

The businesses person communal customers but nary “overlap” successful products and categories, he said.

He further noted that nan woody will “unlock worth and present important synergies while expanding nan standard of nan operations”.

Since its JSE debut successful March 2023, Premier’s marketplace worth has risen by R13.1bn to R19.8bn, arsenic per nan statement.

RFG joined nan JSE successful October 2014 pinch a marketplace worth of R4.3bn. Over that time, it has carried retired 10 buyouts to broaden its products, clients, and marque scope into caller areas.

Pieter Hanekom, RFG’s main executive, believes that nan woody offers “compelling strategical rationale for creating a stronger subordinate successful nan nutrient shaper sector”.

The woody is contingent connected RFG shareholder votes and clearance from title and regulatory bodies. Holders of 77.7% of RFG shares person pledged to backmost nan deal.

As a Category 2 transaction nether JSE rules for Premier, it needs nary Premier shareholder consent. Premier’s largest investors – Brait and Titan – arsenic good arsenic awesome organization shareholders, support nan arrangement.