THE GOOD, THE BAD & THE UGLY
A LITTLE SNIPPET of news that caught our attention last week was food giant Foodcorp buying First Lifestyle – the owner of Pieman’s Pantry, Gull Foods WHEN PERUSING THE WEBSITE of emerging market private equity specialist Actis (which recently sold its controlling stake in packaging group Lenco to Mondi) we stumbled upon a rather revealing “case study”. Obviously, turning Lenco from a sound packaging operator into a contender that would attract the attentions of the industry giants all in a few years was quite challenging for Actis.
The case study noted that Lenco was a “complicated deal” involving “a listed co-investor (Brimstone), a demanding vendor and the appointment of a new CEO within a tight timeframe”.
A demanding vendor? Who? Surely not Lenco kingpin and packaging sector doyen Doug de Jager? Frankly, we wonder just how demanding De Jager could have been, considering the original value for Lenco at the time of Actis’s buy-in in 2003 was roughly R200m. Mondi Packaging just forked out R780m for the company – giving Actis (and Brimstone) a rather good turn on their investment. As such, we’d reckon Actis may well have been a rather demanding vendor too…
SWALLOWING FIRST LIFESTYLE
and Fifers Bakery – for R1,2bn. Some readers may remember that First Lifestyle was once listed briefly in the form of First SA Food Holdings in the late Nineties. The group was one of the first of many delistings that left the bourse after the sentiment driving the late Nineties listing evaporated.
At that point more than a few punters suspected that First Lifestyle was one of the better quality counters to scurry off the JSE. That contention has certainly proved true, with Foodcorp paying R1,2bn for First Lifestyle – a price well above the group’s market capitalisation of between R400m and R500m in 2000 (the year it delisted).
FROM ROOSTERS TO REZCO
THIS COLUMN RECENTLY commented on Sovereign cofounder and executive Rob Spanjaard flying the corporate coup at the Uitenhage-based poultry group to concentrate on asset management issues. While it initially struck us as a curious corporate move, we’re reliably informed that the asset management boutique concerned is Rezco, which Spanjaard part owns with Wally Gray and Peter du Toit.
We’re also told that Spanjaard was formerly an asset manager at Momentum and that it’s rumoured that he once had the distinction of being the overall winner in The Sunday Times share-picking contest way back in the Eighties.