Rhodes Food Group set for R600m JSE listing

Rhodes Food Group, the mainly Cape-based manufacturer of canned produce, cheese, processed meat and ready meals, plans to raise R600-million in a main-board JSE listing.

RFG plans to raise R600m through the issue of new shares which will be used to fund growth and settle debt and shareholder funding that arose from a management buyout of a 29% equity stake in 2012.

The balance of the 100-year-old group is owned by private equity firm Capitalworks and Morgan Stanley Alternative Investment Partners.

CEO Bruce Henderson said the “proceeds of the primary offer would further strengthen” the company’s balance sheet and fund investment to accelerate its expansion.

The initial public offering (IPO), which will not be open to the public, will see it sell new stock equal to about 25% of the existing shares.

The company’s regional division, which accounts for around 65% of revenue, covers SA and other sub-Saharan countries, including Kenya, Mozambique and Zambia.

Vunani Securities analyst Anthony Clark said a listing should be well received: “RFG, with its sizable export market and a growing demand for fruit globally is well-placed to continue its niche growth. With debt repaid post the IPO, an incentivised management and equity to raise future capital for deals, pending the rating, RFG as a mid-cap food counter, potentially, looks as juicy as its canned peaches.”

RFG’s product range includes canned fruit, jam, vegetable and meat products, fresh ready-made meals, pies, pastries and dairy products. It has a growing portfolio of strong brands, including Rhodes, Magpie, Bull Brand, Hazeldene, Portobello and Trout Hall, complemented by private label product ranges prepared for premium domestic and international retailers.
In addition, RFG has an exclusive arrangement with Woolworths (previously Wonderland Foods) to provide ready-made meals on a nationwide basis and to supply Ayrshire dairy products in the Western Cape and Eastern Cape.
RFG has processing and agricultural operations in South Africa and Swaziland and focuses on the “soil to shelf” quality control process which ensures that its products are of the highest calibre.

RFG recorded sales of R1.8bn last year. Its headquarters are in scenic Groot Drakenstein between Paarl, Franschoek and Stellenbosch.

Related reading:

Rhodes Food Group acquires Bull Brand

Rhodes Food Group acquired by management-private equity groups