Consumer goods manufacturer Libstar to raise US$124m ahead of JSE listing

SOUTH AFRICA – Libstar Holdings Pty Ltd, the South African consumer goods manufacturer and distributor plans to raise US$124 million as well as sell its existing shares held by certain stakeholders ahead of May 9 JSE listing.

JSE listing will give it access to additional capital to expand capacity and create additional capabilities in existing production facilities, said Libstar.

The company said it was looking forward to a subscription of new shares which it will offer at US$0.99 and US$1.27 and the process will include a proposal to allow certain existing investors to sell down their shareholdings.

According to the prelisting statement, Libstar, whose biggest shareholder is investment group Abraaj, with 61.55% holding, generated revenue of up to US$697.57 million and operating profit of US$23.30 million, while cash flow from operations was US$45.44 million in the financial year ended December 2017.

Abraaj acquired a controlling stake in the company in 2014, helping it expand into the Middle East and other parts of Africa.

The capital will be used in enhancing organic growth rather than a pursuit of acquisitions which complements its success in identifying industry trends and accessing innovative product categories.

“The capital that we raise from the listing will support our growth prospects and allow us to, among other things, invest further in our categories and manufacturing facilities,” said Chief Executive Officer Andries van Rensburg in the statement.

The company has made capital investments in manufacturing infrastructure including several production facilities, production and packaging lines as well as manufacturing technologies.

Libstar owns and holds the licences of an array of household brands and fast-food products and is seeking a market share in this category with Tiger Brands, RCL Foods, Pioneer Foods and AV.

It holds own brands of cheeses, mushrooms and sauces with rights to distribute and manufacture other local and international brands Tabasco, Laughing Cow and Lurpak.

Through lucrative agreements, the company supplies dealer-own brands and private-label brands to retailers Woolworths, Shoprite Checkers, Pick n Pay and Spar.

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