South Africa-based Rhodes Food Group has announced plans to acquire domestic food producer Pakco for R200m ($14.5m), as part of its expansion strategy.
Pakco owns popular brands, including the iconic Bisto brand, Hinds, Buffalo, Southern Coating, Trotters, Gold Dish and Pakco.
The company supplies its products to all major retailers and wholesalers in the domestic market and also exports them to eight neighbouring African countries.
Rhodes Food Group chief executive officer Bruce Henderson said the group’s strategy is to strengthen its organic growth through acquisition of food companies which will enable the business to expand into new and complementary product categories.
Pakco is the seventh acquisition for Rhodes Food since listing on the stock exchange in October 2014. It has invested R690m ($50m) in acquisitions since then.
Henderson said: “Pakco produces branded and private label ranges of spices, condiments, instant meals and desserts in dry packed, bottled and canned formats in its facility outside Durban.
“The acquisition is aligned with our strategy of expanding into adjacent product categories and will allow us to gain entry into the dry packed foods market.”
However, the acquisition is subject to a due diligence process and competition approval, and is expected to be effective from 1 January 2017.
In 2015, Pakco generated revenue of R221.5m ($16m).
Henderson said Rhodes Food is well positioned to increase the profitability of Pakco and increase sales volumes in the short term.
In October last year, the company announced acquisition of the South African foodservice business of US-based General Mills.
General Mills launched its foodservice business in 1995 and operated its manufacturing business from a highly automated facility in Johannesburg.
