RCL Foods set to sell Vector Logistics for R1.25bn
Food and logistics group RCL Foods has agreed to sell its frozen logistics operator Vector Logistics to a local investment vehicle managed by European private equity fund manager AP Moller Capital for R1.25bn.
The effective date of the deal is July 3 and it will allow Vector Logistics which generated just more than one-tenth of RCL Foods’ revenue in its latest interim results to expand to meet growing demand in Africa.
“Vector Logistics is highly respected with a long track record in SA and we are excited to contribute to its transformative vision for both the industry and the region,” AP Moller Capital partner Joe Nielsen said.
AP Moller Capital is the asset management unit of Danish transportation and logistics giant AP Moller Group.
Vector Logistics, which operates in SA, Namibia, Zambia and Botswana, provides warehousing and distribution, supply chain intelligence, and sales and merchandising solutions for RCL Foods and other companies with a focus on frozen and chilled food products.
UNDERPERFORMED
RCL Foods, which is majority owned by Remgro and is the owner of well-known consumer brands such as Selati sugar, Yum Yum peanut butter, Ouma rusks, Sunbake bread and Rainbow Chicken, has underperformed peers Tiger Brands and AVI in recent years.
Earlier in March it said in its interim results for the six months to end-December that Vector Logistics has struggled with high fuel prices.
Vector Logistics MD Chris
Creed hopes the backing of AP Moller Capital will allow it to achieve its vision of “transforming the logistics industry”, while RCL Foods CEO Paul Cruickshank said the disposal is an important step in reshaping the company’s portfolio.
According to the latest financial information, Vector Logistics had R381.2m in net assets and reported R34.7m in net profit after tax as of January 1 2023.
The sale is subject to regulatory approval by competition authorities and the SA Reserve Bank.