It further indicated that it would be acquiring the share capital in the fruit juice products manufacturer through its wholly-owned subsidiary Rhodes Food Group Proprietary Limited, for an aggregate cash consideration of 165 million rand.
“The board of Rhodes Food Group (RFG) is of the opinion that the acquisition presents an attractive investment opportunity which is aligned with RFG’s strategy of expanding its business through lateral extensions into product categories adjacent to its current product ranges,” the company said.
(READ MORE: Rhodes Food HEPS up 6%)
“Rhodes Food produces an extensive range of fruit purees and juice concentrates which it sells to the international beverage industry. The acquisition offers a significant opportunity to add further value to these products.”
According to the group, the acquisition is subject to several conditions including the Financial Surveillance Department of the South African Reserve Bank approving the acquisition and Rhodes Food completing a comprehensive due diligence investigation, among others.
“The board of RFG is of the view that good synergies will arise from the acquisition and that Rhodes Food is well placed to add value to the Pacmar business,” Rhodes said.
It added that Pieter Hanekom, who was the executive responsible for The Ceres Beverage Company for 13 years, recently joined the Rhodes Food executive team and would head-up the juice operation.
“Pacmar’s total net asset value at the end of its last financial year was 38.6 million rand. Total EBITDA for the financial year ended 31 July 2014 amounted to 22.2 million rand, on revenue of 368.8 million rand,” said [DATA RFG:Rhodes].
“To the extent necessary, the board of RFG shall, as soon as possible after the effective date, procure that the memorandum of incorporation of Pacmar and its subsidiaries are amended to ensure RFG’s continued compliance with its obligations in terms of the listings requirements.”