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Acquisition by RCL FOODS
RCL FOODS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1966/004972/06)
ISIN: ZAE000179438
Share Code: RCL
("RCL FOODS"/"the Group")
ACQUISITION BY RCL FOODS
1. INTRODUCTION
RCL FOODS is pleased to advise shareholders that it has, through its wholly owned
subsidiary RCL Group Services Proprietary Limited ("Company"), on 31 March 2026
entered into binding agreements with Simrose Overseas S.A and Simrose Investments
S.A ("Sellers") in terms of which the Company will acquire all of the ordinary
shares of Martin and Martin Proprietary Limited ("Target") and the Target will
secure ownership of, and licensing rights to, certain intellectual property
("Acquisition").
2. TARGET'S BUSINESS
The Target is a South African-registered company which sells a variety of pet food
products, mostly comprising wet dog and cat food, biscuits, treats, and pet care
products under well-known brands such as Husky, Pamper, Beeno, and Bob Martin.
3. RATIONALE FOR THE ACQUISITION
Given its attractive growth prospects, the pet food category continues to represent
an area of strategic importance for RCL FOODS. The category's momentum is underpinned
by the ongoing humanisation of pets, supported by a growing community of pet parents
who are increasingly focused on enhancing the quality of life of their pets. Against
this backdrop, the category presents compelling opportunities for strong, relevant
brands that are well aligned to these evolving consumer needs.
RCL FOODS, through its existing pet portfolio, is primarily a dry pet food business,
and the Acquisition provides an opportunity for the scaled diversification of the
Group's pet offering, particularly in wet foods, biscuits, treats, and pet care.
The Acquisition further aligns with RCL FOODS' portfolio strategy of growing the
value-added branded component of the Group through access to the Target's strong
pet food brands and capabilities. The combined expertise of the two businesses,
together with the Group's ability to leverage its established central business
services platform, creates a strong foundation for future product innovation and
growth.
4. BENEFICIAL OWNERSHIP OF SELLERS
The Sellers are both privately held offshore registered entities, and in terms of
paragraph 8.13(a)(ii) of the JSE Limited Listings Requirements, the Sellers have
indicated that they do not wish to publicly disclose the identity of their ultimate
beneficial owner(s). Based on the information made available to RCL FOODS, the Group
is satisfied that neither the Sellers nor their ultimate beneficial owner(s) are
related parties to RCL FOODS, its directors, prescribed officers or controlling
shareholder and that the non-disclosure of the identity of the ultimate beneficial
owner(s) would not be material to an assessment of the terms of the Acquisition.
5. CONDITIONS PRECEDENT
The implementation of the Acquisition is subject to the fulfilment or waiver (to
the extent legally permissible) of the following conditions precedent ("Conditions
Precedent"):
• RCL FOODS obtaining the consent of its lenders to the Acquisition;
• The Target obtaining the consent of its lenders to the Acquisition to the extent
necessary, and the release of security held;
• The conclusion and unconditionality of agreements relating to the sale and
licensing of certain intellectual property to the Target;
• The delivery of any required regulatory or contractual notifications arising
from the change of control of the Target resulting from the Acquisition;
• The conclusion of an agreement providing for the accelerated vesting of an
historical long-term incentive arrangement relating to the Target;
• The receipt of any required exchange control approval;
• The Competition Authorities in applicable jurisdictions granting such approvals
as are required in terms of applicable laws to implement the Acquisition;
• The issuance of a warranty and indemnity insurance policy on terms acceptable to
the parties;
• The conclusion of an escrow arrangement, pursuant to which a portion of the
acquisition consideration will be held in escrow after the effective date to
provide security for the sellers' indemnity obligations; and
• Following the fulfilment or waiver (as applicable) of all of the other Conditions
Precedent, it being determined or agreed that a material adverse change has not
occurred.
6. OTHER SIGNIFICANT TERMS
The Acquisition is subject to other terms and conditions, including warranties,
undertakings, indemnities, limitation of liability and breach provisions that are
normal for a transaction of this nature.
7. EFFECTIVE DATE
The effective date of the Acquisition will be upon fulfilment or waiver (as
applicable) of the Conditions Precedent. Implementation of the Acquisition will
either take place on the last day of the month in which the last of the Conditions
Precedent are fulfilled or waived (as applicable), or the last day of the subsequent
month, depending on the number of days between fulfillment or waiver (as applicable)
of the Conditions Precedent and the last day of the month.
8. ACQUISITION CONSIDERATION
The Acquisition consideration is determined as an enterprise value of R695,000,000
(six hundred and ninety five million rand), subject to customary adjustments for
cash and debt calculated at the effective date.
9. FINANCIAL INFORMATION
9.1. As at 31 December 2024 being the date of the latest audited annual financial
statements of the Target, which were prepared in terms of International
Financial Reporting Standards, the Target reported:
• Net assets of R54,5 million;
• Profits after tax of R23,3 million; and
• Earnings before interest, tax, depreciation and amortisation ("EBITDA")
of R75,2 million.
9.2. Adjusted EBITDA for the period ended 31 December 2024, excluding once-offs and
non recurring items was R90,2 million. This is compiled by adjusting the audited
IFRS EBITDA of R75.2 million for identified once-off and non-recurring items.
Adjusted EBITDA is an unaudited measure which does not comply with IFRS but
has been provided to illustrate a normalised perspective of EBITDA.
10. CATEGORISATION OF THE ACQUISITION
The Acquisition constitutes a category 2 transaction in terms of the JSE Limited
Listings Requirements, and no shareholder approval is required.
Westville
31 March 2026
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 31-03-2026 02:50:00
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