Brait aims to raise R3.7bn from Premier

Brait, the investment holding company listed in Luxembourg and Johannesburg, finally revealed details yesterday of its plans to list consumer packaged goods company Premier Group separately on the main board of the JSE with the aim of raising up to R3.7 billion.

Brait is the controlling shareholder in Premier Group through its Brait Mauritius Limited subsidiary.

According to its Sens notice, listing Premier will help the food producer pursue growth and strengthen its market position across major categories.

The move will see Premier – which produces well-known South African brands like Blue Ribbon bread, Iwisa maize meal, Snowflake, Lil-Lets and Dove cotton wool products – competing publicly alongside major JSE-listed fast-moving-consumer-goods groups Tiger Brands, AVI and RCL Foods, among others.

“The decision to embark upon a JSE listing is an important and exciting step in Premier’s growth story,” says Premier CEO Kobus Gertenbach.

“The transition into the listed environment is expected to support Premier’s efforts to drive its organic and acquisitive growth strategy and strengthen its market position across all business areas.”

“The executive management team will remain materially invested in Premier, thereby ensuring strong alignment between existing and new shareholders,” he adds.

Brait is looking to secure R3.7 billion for its holding in Premier Group as part of the Initial Public Offering (IPO).

This, together with its share of a November 2022 distribution of R950 million, is expected to see Brait receiving gross proceeds of up to R4.7 billion upon the successful listing of Premier.

The capital raised from the unbundling is anticipated to “assist in addressing Brait’s future liquidity requirements”.

Premier’s shares are expected to be priced between R53.82 and R67.04 per offer share, bringing the company’s equity valuation in the range of R6.9 billion and R8.6 billion.

“The proposed pricing range equates to a 6x – 7x last 12 months to 30 September 2022 multiple of earnings before interest, tax, depreciation, and amortisation [ebitda] to enterprise value,” Brait noted in its Sens announcement.

“This represents a 10% [to] 28% discount to Brait’s latest valuation of Premier, after adjusting for the R1 billion refinancing of Premier’s long-term debt on 2 November, 2022.”