12 Jan 2016 SA’s Bounty Brands buys first local and overseas food businesses
JSE-bound consumer goods group, Bounty Brands, has made its first local and international food acquisitions.
Bounty Brands is owned by Cape Town-based private equity group, Coast2Coast, which listed health brands conglomerate Ascendis in late 2013.
The business, which is chaired by former Pick n Pay CEO, Nick Badminton, has acquired its first South African food business, Liberty Foods, a supplier to the local food services industry as well Sonko, a producer of rice and dry bread products in Poland.
According to its website, 12-year-old Liberty Foods was “born out of the need to enable smaller food service distributors access to products specifically produced for the food service Industry without having to purchase full truckloads or full container imports, as well as making products more accessible to Industrial users”.
Together, the two food acquisitions are expected to add R850m a year to Bounty’s annual revenue, bringing total revenue to just short of R2bn.
The deals, announced late last year for undisclosed sums, form part of the company’s strategy to grow revenue to over R5bn in the next two years in the run-up to an eventual listing.
“With food services growing at 10% over the past five years, Liberty is an excellent investment for Bounty in a fast-growing and defensive sector,” Stefan Rabe, Bounty’s CEO said.
Liberty holds a number of long-term exclusive distribution agreements including Heinz, Wellington and Appletiser and distributes as far afield as Kenya, Zimbabwe and Zambia.
Earlier this year, Bounty Brands acquired direct-selling business Annique Health and Beauty, which sells rooibos-based skin and healthcare products and Musgrave Agencies which holds the Jeep apparel brand sold in SA and Australia.
Rabe said the group was upbeat about investing in Poland: “Sonko holds a dominant market position in Poland and its products are exported to 22 countries. Sonko has focused on becoming the market leader in Poland, but having achieved this, it is well positioned to grow its exports significantly.
“We are certainly not the first local business to invest there. In fact, Poland has been somewhat of a success story for South African businesses. It is well situated geographically and presents the right combination of opportunity and infrastructure.”
Coast2Coast and Bounty Brands will set up an office in Europe to pursue further acquisitions.
It is believed that Bounty Brands, whose stable includes Chappers Sports Direct, the distributor of the Vans footwear brand and beauty products group Cosmetix, will be listed in 2017.
Source: BDLive.co.za