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Groot Drakenstein – Western Cape based food producer, RFG Foods Holdings, plans to list on the main board of the JSE in the Food Products sector on Thursday, 2 October.
RFG Foods is a leader in convenience meal solutions, catering for needs across consumer income groups.
The pre-listing statement issued today provides details of RFG Foods’s intention to raise R600 million through the issue of up to 57 million new shares and the concurrent sale of 42.75 million shares offered pro rata by the existing shareholders, Capitalworks (71%) and management (29%).
The offer price range has been set at R10.50 to R13.50 per share, valuing the offering at approximately R1.1 billion based on the mid-point of the offer range. RFG Foods’s free float is expected to be approximately 40%.
The net proceeds of the listing will be used to invest in capacity expansion, reduce debt and provide greater balance sheet flexibility. The settlement of funding with part of the proceeds of the listing and the renegotiation of loan rates are expected to result in annual finance cost savings of R76 million.
Chief executive officer, Bruce Henderson, said: “We have invested R158 million over the past three years in maintaining and upgrading our eight production facilities in South Africa and Eswatini with new technology and processes. A further investment of R229 million is planned for 2014 and 2015.”
Henderson said the listing would also provide a currency to accelerate RFG Foods’s strategic growth plan and create financial capacity for selective acquisitions.
The RFG Foods management team has a track record of acquiring underperforming assets, improving operations and either revitalising existing brands or extending the Rhodes brand into new categories. This includes the acquisitions of Magpie Foods (2004), Sunpie (2006), Giants Canning (2007), Del Monte South Africa (2010) and Bull Brand (2013).
A culture of continuous innovation across packaging, production processes and new product development has ensured that RFG Foods has maintained long-term relationships with local and international customers.
RFG Foods has a growing portfolio of strong brands across its fresh, frozen and long-life product offering, including Rhodes, Magpie, Bull Brand, Hazeldene, Portobello and Trout Hall. These brands are complemented by private label product ranges prepared for selected domestic and international retailers.
The Rhodes brand is either the number 1 or strong number 2 brand in most of its targeted product categories and has experienced strong growth in market share in recent years. In South Africa, RFG Foods has leading market share positions in canned pineapple (50% share), tomato paste (33% share) and jam in glass jars (24%), supported by number two positions in canned fruit, canned jams and tomatoes.
Bull Brand is the iconic market leader in corned meat with 39% market share.
Pies and pastries are sold under the Magpie brand, as well as through Woolworths. An exclusive national supply agreement with Corner Bakery commenced in July 2014.
RFG Foods is the exclusive supplier of ready-made meals and pies to Woolworths nationally, as well as being their exclusive provider of Ayrshire milk and cream in the Western and Eastern Cape.
In the financial year to September 2013, RFG Foods reported revenue of R1.86 billion, with 35% generated internationally through exports to Europe, the Far East, USA, Canada, Australasia, Russia and the Middle East, and EBITDA of R227 million. For the nine months to June 2014, revenue increased by 34.5% over the prior period to R1.77 billion and EBITDA increased by 32% to R195 million.
Issued by Tier 1 Investor Relations on behalf of RFG Foods Holdings
For further information kindly contact:
Tier 1 Investor Relations
082 468 1507
Note to editors:
The pre-listing statement for RFG Foods Holdings is available on the company’s website www.rhodesfoodgroup.com
This document and the information contained herein are not for distribution in or into the United States of America. This document does not constitute an offer to sell, or a solicitation of an offer to purchase, any securities in the United States. The securities of RFG Foods Holdings Limited have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
This document does not constitute an offer to the public for the sale of or subscription for, or the solicitation of an offer to buy and/or subscribe for, shares as defined in the South African Companies Act, No. 71 of 2008 (as amended) or otherwise (the “Act”) and will not be distributed to any person in South Africa in any manner which could be construed as an offer to the public in terms of the Act. This document does not constitute a prospectus registered and/or issued in terms of the Act.