SOUTH AFRICA – Premier Group Limited, a South African consumer packaged goods company, has revealed its intention to list all of its issued ordinary shares on the Main Board of the securities exchange operated by the JSE Limited by way of an Initial Public Offering, subject to market conditions and the requisite approvals by the JSE.

Premier provides a multi-brand, multi-product offering across a wide range of categories across numerous channels, strategically positioning itself within the food and beverage and home and personal care sectors and maintaining the flexibility to capitalise on growth areas in the CPG industry.

Kobus Gertenbach, Chief Executive Officer of Premier said, “The decision to embark upon a JSE listing is an important and exciting step in Premier’s growth story.

“The transition into the listed environment is expected to support Premier’s efforts to drive its organic and acquisitive growth strategy and strengthen its market position across all business areas.

“The executive management team will remain materially invested in Premier, thereby ensuring strong alignment between existing and new shareholders.”

Under the plan, investment company Brait, which currently holds 99% of Premier, intends to raise gross proceeds of up to ZAR3.7 billion (US$215m).

This, together with its share of a November 2022 distribution of R950 million (US$55.2m), is expected to see Brait receiving gross proceeds of up to R4.7 billion (US$273m) upon the successful listing of Premier.

The capital raised from the unbundling is anticipated to assist in addressing Brait’s future liquidity requirements.

A proposed pricing range of ZAR53.82 (US$3.13) – ZAR67.04 (US$3.9) per Offer Share, equates to an equity valuation of ZAR6.9 billion (US$401m) – ZAR8.6 billion (US$500m)

“The proposed pricing range equates to a 6.0x – 7.0x last twelve months to 30 September 2022 multiple of earnings before interest, tax, depreciation, and amortisation (‘EBITDA’) to enterprise value.

“This represents a 10% – 28% discount to Brait’s latest valuation of Premier, after adjusting for the ZAR1.0 billion (US$58.1m) refinancing of Premier’s long-term debt on 2 November 2022. ZAR950 million (US$55.2m) of these refinancing proceeds were used to make a distribution to Premier’s shareholders prior to the Listing,” highlighted the company.

According to Brait, it has already secured irrevocable agreements with Titan Premier Investments Proprietary Limited as well as an institutional investor to purchase 38.6% of the offer shares.

Titan has agreed to buy 36.2% of the offer shares, while the institutional investor has committed to purchasing 2.4%.

In addition, Titan and Rand Merchant Bank, a division of FirstRand Bank Limited have committed to underwrite R2.9 billion (US$168m) and R0.5 billion (US$29m) respectively at the bottom of the price range [R53.82 per offer share).

The Listing is subject to customary conditions for capital markets transactions of this nature, including the minimum free-float and shareholder spread requirements as prescribed by the JSE Listings Requirements being met.

Premier produces and markets iconic South African brands such as Snowflake, Blue Ribbon, BB Bakeries, Iwisa, Nyala, Super Sun, Impala, Manhattan, Super C, Mister Sweet, Champion toffee, Rascals, Candy Tops, Lil-lets, and Dove cotton wool; as well as leading brands in Mozambique which include CIM, Florbela, Polana and Top Score; and in eSwatini, brands which include SUB, Mister Bread, Blue Ribbon, Iwisa, Bakers Pride, and Mandla Mageu.

According to DataOrbis market share data by value for the 12 months to August 2022, Premier had an approximate 24% market share in bread, 32% market share in flour, 20% market share in maize, 18% market share in total sugar-based confectionery (rising to a 20% market share within Premier’s defined segments comprising gums and jellies, marshmallows, chews, compressed and boiled sweets, toffees, and liquorice), and an 18% market share in feminine care in South Africa.

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