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*Content brought to you by diversified consumer-goods company, Bounty Brands, a subsidiary of Coast2CoastCapital.
Bounty Brands, the fast-growing diversified consumer goods company, continues to make waves with another four acquisitions in the last six months, for a total consideration of roughly R1.2 billion.
A relative newcomer to the FMCG world, Bounty Brands currently boasts revenue of R3.2bn and operating profit of R500m, executing on its strategy to grow beyond R5bn in revenue and R1bn in operating profit before listing in 2017.
Bounty Brands’ strategic focus is on Foods, Personal Care and Home Care and it has now set its sights on growing its presence in these categories in Central and Eastern Europe (CEE). The specific emphasis is on Poland, where Bounty already owns Sonko, the market-leading, value added rice and healthy snacks business. The drive to expand internationally is part of Bounty Brands’ intention to list on the London Stock Exchange as well as on the JSE.
“We’ve always aimed to diversify our income stream geographically. The CEE region provides us with an opportunity to acquire leading brands in a relatively fast-growing, but stable market,” says Stefan Rabe, CEO of Bounty Brands.
The first acquisition of Rieses Food Imports bolsters the revenue of the Foods division to over R1.2bn and provides strong distribution and sales capabilities for future bolt-on acquisitions. Rieses is a leading ambient food supplier to the retail market in South Africa, with a portfolio of successful brands like Serena, Offenau, Jemz and Sea Queen. Rieses also distributes a host of well-known international brands like Sonko, Pietro Coricelli, Real Foods, Fantico and others.
Bounty’s Home Care category has now been established with the next 2 deals, Tuffy and Goldenmarc, which together contribute revenue of approximately R1bn to the group. Both are leaders in their respective categories and supply most of the large retailers in South Africa. Tuffy manufactures and distributes a range of recycled refuse and carrier bags, as well as food bags and other household products. Says Rabe: “Tuffy is a fantastic business and its brand has become synonymous with durable refuse bags that are made from 100% recycled materials – something few competitors achieve.”
Goldenmarc, which is a 60 year old brand, is a distributer of an extensive range of its own brand and private label household cleaning products, tableware and kitchen accessories.
Footwear Trading, the fourth acquisition, brings with it two iconic fashion brands in Diesel and Levis, adding further fashion clout to an already impressive group of leading apparel and footwear brands like Vans, Hurley and Jeep. The addition of Footwear Trading brings the total revenue contribution to the group by apparel and footwear brands to over R1bn.
“The consolidation of leading apparel and footwear agency brands has been a successful strategy for Bounty in South Africa, creating a sizeable business with critical mass and a relatively stable income stream,” says Rabe.
Coast2Coast Capital, with its team of 50 experienced investment professionals, is instrumental in driving and executing Bounty’s acquisition strategy. This allows the Bounty executive team to focus on organic growth and implementing synergy and integration initiatives. With just over a year to go before the planned listing, CEO Stefan Rabe is confident that Bounty Brands will be ready.
“We have been preparing for listing almost since inception and most of the necessary controls and structures are already in place. Although we are big enough to list locally, another few international acquisitions in our target categories will make us more attractive to international investors,” concludes Rabe.
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