Cater Chain distributes mainly red meat products across South African and a selection of markets in Africa. The products include the likes of beef, lamb, mutton, chicken, bacon and ham.
“The major upside will be the opportunity to integrate currently outsourced business into the facility at a relatively low cost of entry and derive an immediate income stream compared to the alternative of constructing a purpose-built facility, which would entail higher set-up costs and a three to four year lead-time before synergies could be leveraged through the business,” said Kevin Hedderwick, group CE of [DATA FBR:Famous Brands].
Roy and John Tem-Tem, founders of Cater Chain, said the partnership with Famous Brands will help them reach their goals and provide them with many opportunities.
“Through this new venture, Cater Chain will profit from Famous Brands’ proven business model and the quality and scale of its customer base; in turn we will contribute a committed and experienced management team and an accredited modern facility with extensive production capacity,” they said.
(READ MORE: Famous Brands continues expansion into Africa)
The acquisition will be settled from cash reserves as it falls below the threshold of a categorised transaction in terms of the Listings Requirements of the JSE Limited. It is also subject to Competition Commission approval.
In order for a smooth transition business into Famous Brands, Cater Chain’s senior management team will be retained.