THE GOOD, THE BAD & THE UGLY

Finweek English Edition - - Companies & markets - EDITED BY MARC HASENFUSS

DE­MAND­ING VEN­DORS

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.

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