PICK N PAY STORES LIMITED - Voluntary announcement relating to the acquisition of the operations of the Tomis group

Voluntary announcement relating to the acquisition of the operations of the Tomis group

Pick n Pay Stores Limited
Incorporated in the Republic of South Africa
Registration number: 1968/008034/06
JSE Share Code: PIK
ISIN code: ZAE000005443
(“Pick n Pay” or “the Group”)


Voluntary announcement relating to the acquisition of the operations of the Tomis group
of companies

1. Introduction

Pick n Pay is pleased to announce that the Group has concluded a sale and purchase
agreement to acquire 100% of the business operations of the Tomis group of companies
(“Tomis”) for a purchase consideration of R340 million (“the Acquisition”).

2. Description of Tomis

Established in 1993, Tomis is a state-of-the-art abattoir and meat processing and packaging
business, supplying lamb, beef and other quality fresh meat products to wholesalers and
retailers, including Pick n Pay. Tomis’ production facilities are situated near Wellington,
approximately 100km from Cape Town. Tomis’ key assets include a 15,000m2 under-roof lamb
feedlot, lamb and beef abattoirs, and a meat packaging plant situated on a 140-hectare farm.
Tomis has approximately 320 employees, and recorded sales of R720 million for their 2022
financial year. It operates under the highest animal welfare, food hygiene, ethical, and
environmental standards. Tomis owns the ‘TOMIS’ and ‘Roam Free’ trademarks, which are
being acquired as part of the transaction.

3. Rationale for the Acquisition

Meat and butchery is a key product category for both Pick n Pay and Pick n Pay QualiSave
under the Group’s Ekuseni strategy. The Acquisition will significantly enhance the Group’s
fresh meat offer to customers, while providing the Group with the following benefits:

-   A higher-quality, more consistent, red meat offer, a category that is a key element of our
    customer value proposition;
-   An enhanced ability to develop and roll out innovative, value-added, products for
    customers;
-   A reduced cost for red meat, unlocking the ability to give customers greater value;
-   Centralised meat packaging, providing a more reliable supply, and unlocking synergies
    through the Group’s centralised supply chain distribution network; and
-   Sales growth opportunities, with the potential to supply Pick n Pay franchisees, Boxer, and
    other retailers and wholesalers.

4. Key terms of the Acquisition

The Group will acquire 100% of the Tomis business operations. This will be split into an
upfront cash consideration of R323 million, and a fixed capped deferred price of R17 million
payable on the third anniversary of the transaction. Tomis’ managing director, Laurie
Terblanche, is to remain with the Group.
5. Conditions precedent
The Acquisition remains subject to a number of conditions precedent, including the relevant
regulatory approvals (Competition Commission and others).
6. Classification of the Acquisition
The Acquisition is not a categorised transaction for the purposes of the JSE Listing
Requirements and therefore shareholder approval is not required.


By order of the Board
Cape Town
28 June 2023                                            Sponsor: Investec Bank Limited

Date: 28-06-2023 05:00:00
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