Impact investor Sanlam Private Equity acquires majority stake in SA premium red meat supplier Cavalier Group

SOUTH AFRICA – South Africa’s state-owned development bank Land Bank along side an agricultural and trading firm Griekwaland-wes Korporatief Bpk (GWK), have sold their stake in Cavalier Group of Companies, a supplier of premium red meat products in the country to Sanlam Private Equity (SPE).

The transaction whose amount has not been disclosed was undertaken through SPE’s Legacy Range-Private Equity Fund, one of its three impact funds launched in June 2020.

To this end, Sanlam has acquired a majority stake in Cavalier Group, specializing in creating the shortest and most cost-effective route for red meat products from farm to fork.

The group consists of five entities: Cavalier Foods, Cavalier Livestock, Cavalier Abattoir, Cavalier Feeders and the holding company. 

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According to reports by Africa Global Funds, the investment by SPE comes at a time when the meat processor had started embarking on various growth initiatives which needed a strong and empowered equity partner to help it achieve its growth plans.

This planned growth is aimed to create further employment opportunities – another win for jobs at a time of record-high SA unemployment levels.

“We are excited to have a partner such as Sanlam Private Equity in our business. With their strong empowerment credentials and their strategic focus of helping businesses grow, we are confident that our partnership will be a very successful one in the future”, said Kabols Le Riche, CEO and founder of Cavalier Group.

The new partnership will also enable the organization venture into the export markets such as the Middle East and supplying quick-service restaurants and hospitality businesses.

Global processed red meat market size is projected to reach US$ 668 billion by 2023

Technavio Research

This will be in addition to its current market base of supplying major retailers. Cavalier is one of only two Woolworths-approved red meatpackers in South Africa.

“As SPE, we partner with strong management teams, and we invest in businesses that have good growth prospects and where we believe our involvement will unlock additional value in the business.

“We were attracted to Cavalier Group because we believe that this business meets these requirements,” Paul Moeketsi, SPE Managing Partner, said.

Cavalier Group is the largest employer in the Cullinan region having 1 412 employees with 60% being women.

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“Our impact strategy is to create jobs and empower disadvantaged groups, focusing on women empowerment and youth unemployment.

“We also invest in companies that offer job growth to its employees as well as opportunities to improve their standards of living,” Moeketsi added.

Cavalier also boasts a strong ESG track record.  They have installed solar panels and a biogas plant using organic animal material.

The company has also shown good governance in ensuring compliance with food safety regulations and health and safety protocols.

The meat packer recently built a state-of-the-art meat processing, deboning and packing facility for its AAA-grade red meat business.

With its vertically integrated value chain and as the largest red meat co-packer in the country, Cavalier is strategically positioned to take advantage of several red meat opportunities in future.

The global processed red meat market size is projected to reach US$ 668 billion by 2023 at a CAGR of 9%, according to a new report by Technavio Research.

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