Rhodes Food Group is buying KwaZulu-Natal based producer Ma Baker for R212 million as it seeks to strengthen its position in SA’s growing pie and pastry market.
The listed company, which owns brands such as Bull Brand, Magpie and Squish, says in a statement released on Monday that Ma Baker is the eighth and largest acquisition made by Rhodes Food Group since listing in 2014.
It has spent R900 million on deal since listing.
Ma Baker produces pies, pastries and snacking products at its manufacturing facilities in Pinetown and Pietermaritzburg. Established in 1987, Ma Baker it has grown organically and through acquiring two regional competitors over the past two decades. Products are sold and distributed nationally through distribution centres in Johannesburg, Bloemfontein, Port Elizabeth and Cape Town.
CEO Bruce Henderson said the group’s strategy is to complement organic growth by acquiring food producers which will strengthen existing product categories or enable entry into complementary products.
“Ma Baker is a well-established brand and a market leader in KwaZulu-Natal. The acquisition will strengthen our position in the pie market as well as diversifying our customer base and our geographic presence,” he said.
Rhodes entered the pie market in 2004 and produces a range of pies and pastries under its Magpie and Saint Pie brands at its facility in Aeroton, Gauteng. Rhodes also produces pies and pastries under private label for Woolworths and Corner Bakery.
Henderson said the acquisition will not only create integration synergies in the pie business but also in the snacking and bakery operations with Alibaba Foods and General Mills SA, which have been acquired by Rhodes over the past year. Alibaba Foods manufactures halaal Eastern snacks and General Mills produces dry and frozen bakery products.
The listed company reported turnover up 53.5 percent to R2 billion in the six months to March. Profit after tax almost doubled, gaining 89.2 percent to R110 million and headline earnings per share – a key measure of profitability – came in at 50.1 c, a 36.9 percent gain on a normalised basis.
Ma Baker generated revenue of R248 million and earnings per share before interest, tax, `depreciation and amortisation of R24 million in its latest financial year. The acquisition, which will be settled in cash, is subject to a due diligence process and competition approval.
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