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Cape Town - Coast2Coast’s consumer brands business Bounty Brands has made two food acquisitions in deals with a combined value of over R1.2bn.
Bounty has bought Liberty Foods in South Africa and closed its first international acquisition, buying Sonko, a producer of rice cakes, rice, groats and dry bread products in Poland.
According to Stefan Rabe, Bounty’s CEO, Sonko has a dominant market position in Poland and is well positioned to grow its exports significantly.
“Poland is well situated geographically and presents the right combination of opportunity and infrastructure,” said Rabe.
Coast2Coast Investments and Bounty Brands will now set up an office in Europe to pursue complementary acquisitions.
Rabe said Bounty’s international expansion is part of a well-defined strategy to diversify its earnings. While the focus on growth in South Africa remains, Bounty and Coast2Coast Investments have teams active in selected international markets, searching for opportunities.
“We look for profitable and defensible businesses, with a long track record of selling trusted brands. In Sonko we have found a business that ticks all the boxes," he added.
As for Liberty Foods, Bounty’s first South African food acquisition, Rabe said with the food services sector growing at 10% over the past five years, Liberty is both an excellent investment and a well-established distribution channel for future investments in local food brands.
Together, the two food acquisitions are expected to add R850m a year to Bounty’s annual revenue, bringing total revenue to just short of R2bn. The deals form part of the company’s strategy to grow revenue to over R5bn in the next two years in the run-up to an eventual listing.
