Wrap Text
Strategic coup for Famous Brands with acquisition of Lamberts Bay Foods
FAMOUS BRANDS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1969/004875/06)
JSE Share code: FBR
ISIN code: ZAE000053328
(“Famous Brands” or “the company”)
STRATEGIC COUP FOR FAMOUS BRANDS WITH ACQUISITION OF
LAMBERTS BAY FOODS
Johannesburg; Thursday, 26 May 2016: Famous Brands has acquired
100% of the business of Lamberts Bay Foods (LBF), a wholly-owned
subsidiary of JSE-listed Oceana Group Limited (Oceana). The
company processes French fries and other value-added potato
products at its factory in Lambert’s Bay, Western Cape, for sale
to wholesalers, retailers and restaurant chains. LBF is one of
only three French fries manufacturers in South Africa. The
business has supplied product to Famous Brands for the past 20
years and has on several occasions been recognised as a Supplier
of the Year in the Group’s annual Awards competition.
Lamberts Bay Foods was established in 1995 by Oceana, as a social
responsibility project to offset job losses resulting from the
decline in fishing employment opportunities in the region, and
has subsequently matured into a viable commercial operation.
Today LBF is the single largest employer on the West Coast north
of St Helena Bay, employing 305 people. In addition,
approximately 2 250 jobs are created on a national scale through
the LBF operation*. LBF staff who are currently beneficiaries
of the Oceana Empowerment Trust will not be affected by this
transaction and will continue to receive their share of the
benefits.
Kevin Hedderwick, Famous Brands’ Group Strategic Advisor with
responsibility for M&A activity, says, “Acquiring LBF is a major
coup in terms of advancing the Group’s stated goal to build
capability and capacity across our Logistics and Manufacturing
Supply Chain operations. This acquisition not only affords us
security of supply of a key strategic menu item for our
franchised network, it also provides us with an existing food
services and retail customer base, which has significant
expansion potential over time.”
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,
whereafter all suspensive conditions will have been fulfilled.
“Famous Brands has enjoyed a long relationship with LBF, having
been our biggest customer for a number of years,” comments Oceana
CEO, Francois Kuttel. “Our motivation to do this transaction
with Famous Brands was our tacit recognition of their ability
to maintain and grow LBF in line with their core business. The
acquisition strengthens LBF’s potential for growth and enhances
the long-term certainty of product off-take that only a company
of Famous Brands’ market leading position can provide. I am
confident that the future of the business is in very good hands
and that LBF will continue to expand under Famous Brands’
expertise. This transaction enhances the long term job security
of the staff as well as the positive impact that the business
has on the Lambert’s Bay Community,” adds Kuttel.
Hedderwick comments, “Although the South African potato
processing industry is growing rapidly to meet increasingly
strong demand fuelled by the brisk growth in food services and
the convenience market, it lags its peer industries in developed
countries and illustrates the growth potential for the LBF
business.”
Currently, LBF processes some 24 000 tons of potatoes per annum.
Potatoes are sourced mainly from Mpumalanga, Limpopo, Free State
and the Sandveld region of the Western Cape. Long-term
relationships with growers close to Lambert’s Bay are one of the
business’s key strategic advantages and accordingly, an ongoing
development initiative.
“The LBF plant operates according to best practice standards and
is regarded by customers as having the lowest product-defect
level in the industry,” notes Hedderwick. “Quality Assurance
is at a very high level. The facility has been awarded the SANS
10330 (HACCP) accreditation, it follows FSA Audit Guidelines,
and complies with industry benchmarks, FSSC 2000 as well as
GFSI,” he adds.
Hedderwick elaborates, “Our goal is to ensure continued quality
and consistency of product for all of LBF’s customers. The
existing operation has a good record of accomplishment and is
well-respected and supported. The plant integrity and condition
is exceptional, and while we have identified opportunities to
enhance and up-scale the business, there is no intention to move
the facility, or alter arrangements with LBF’s employees or
growers. They are key contributors to the success of LBF and
we look forward to welcoming them into our Group.”
Kuttel adds, “We are delighted that this transaction will
benefit all parties. Given Famous Brands’ extensive
experience in managing supply chain businesses, we are
confident that they will unlock further value for all
stakeholders.”
Hedderwick concludes, “Famous Brands’ management has set an
audacious operating profit target of R1 billion by February 2018
– this acquisition will make an important contribution to
achieving that goal.”
Midrand
26 May 2016
Sponsor
The Standard Bank of South Africa Limited
For further information:
Kevin Hedderwick Francois Kuttel Frederic Cornet
Famous Brands Oceana Group Instinctif
011 651 5812 021 410 1428 083 307 8286
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