FAMOUS BRANDS LIMITED - Famous Brands Acquires Majority Stake in Cater Chain Food Services Building Further Manufacturing Capability

Famous Brands Acquires Majority Stake in Cater Chain Food Services Building Further Manufacturing Capability

FAMOUS BRANDS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1969/004875/06)
JSE Share code: FBR
ISIN code: ZAE000053328
("Famous Brands")


FAMOUS BRANDS ACQUIRES MAJORITY STAKE IN CATER CHAIN FOOD
SERVICES BUILDING FURTHER MANUFACTURING CAPABILITY

Famous Brands has acquired a controlling 75% stake in Cater Chain Food 
Services (“Cater Chain”), a local business distributing primarily red 
meat products to customers across South African and into certain markets 
in Africa.

The purchase consideration falls below the threshold of a categorised 
transaction in terms of the Listings Requirements of the JSE Limited 
and will be settled from cash reserves. The transaction is subject to 
Competition Commission approval, and pending fulfilment of this condition, 
the effective date will be the first day of the month following that month
whereupon all of the conditions precedent have been fulfilled. Cater Chain’s 
senior management team will be retained, thereby facilitating a seamless 
integration of the business into Famous Brands’ operations.

Established by siblings Roy and John Tem-Tem in 2004, Cater Chain today 
trades from a modern 15 900m² production facility comprising latest-
technology processing equipment and significant freezer and chiller
capacity.    The plant, which is situated in City Deep in Johannesburg, 
consists of separate Halaal and non-Halaal facilities. Production capacity 
is in the order of 900 tons per month, and products supplied to the food 
services market include beef, lamb, mutton, chicken, bacon and ham.

Group CE, Kevin Hedderwick says, “This acquisition further underpins our 
strategy to establish Famous Brands as a total food service solutions company.      
Our vertically integrated business model, comprising our branded food service
franchising division supported by our manufacturing and logistics divisions 
is a key strategic advantage, and our steadfast mission over recent years has 
been to build capability across all three pillars of the business.”

Hedderwick comments, “This acquisition appealed to us for a number of reasons.  
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. In addition, 
the facility will provide additional storage capacity in terms of our bulk beef
requirements.” “Furthermore,” he notes, “operating on a five-day week, single-shift 
system, the capacity to take on additional business is significant.”

Roy and John Tem-Tem comment, “We are extremely excited about this transaction. 
We have always been ambitious for our business, and being offered the opportunity 
to partner with Famous Brands, the recognised leader in the branded food services 
sector, will enable us to realise our goals and unlock Cater Chain’s full potential.      
Having been in the industry for over 30 years we understand that change is required 
for a business to grow and we look forward to embracing these changes and the benefits 
that will accrue to Cater Chain as a result. 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. We have always 
strived to manufacture the best quality product for our customers and are confident 
that this philosophy will be an asset in the future.”

Hedderwick   concludes, “To take on a sophisticated manufacturing operation such as this 
requires courage, and the fact that we are able to do so with confidence is indicative
of the significantly improved skills base in our manufacturing division, a function of 
intensive focus on building capability in this part of our business over the past few 
years.”


Midrand
08 December 2014

Sponsor
The Standard Bank of South Africa Limited

Date: 08/12/2014 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.