Nompumelelo Magwaza
A NEW player in the fast-moving consumer goods sector, Bounty Brands, plans to buy three more companies before it makes its debut on the JSE in three years time. It will take on the likes of AVI and HomeChoice.
The newly-launched group said yesterday that it was only beginning its acquisition trail after buying three consumer goods companies last year for R500 million. Bounty Brands had acquired: direct selling business Table Charm, footwear and apparel company Chappers Sports Direct, as well as cosmetic company Cosmetix.
Chappers Sports Direct distributes Vans footwear and apparel to over 1 000 retailers across southern Africa. It also owns several concept stores, with more stores due to open in the next year.
Cosmetix owns brands such as Caribbean Tan and is the licenced distributor of the Essence and Catrice range of colour cosmetics. Essence colour cosmetics are sold through Clicks and Dischem stores throughout the country.
With these acquisitions under its belt, Bounty Brands said it was set to compete with other consumer goods companies across Africa.
Bounty Brands is controlled by private equity specialists, Coast2Coast, which listed Ascendis Health last year.
Ascendis Health, of which Coast2Coast still holds 45 percent, has a market capitalisation of R4.34 billion.
Stefan Rabe, the managing director at Bounty Brands, said: “Bounty Brands is the operating platform that Coast2Coast will use to invest in the non-health consumer goods sector.”
The group already had relationships with investors based in the UK, Europe and US, who were interested in the African consumer goods sector, he said. “The listing will give us returns on our investment and also facilitate the raising of further capital. Our aim is to create a consumer goods company that can rival the big guys across the continent.”
He said the acquisition of three more consumer goods companies was in the pipeline.
This will bring the group’s total revenue to around R1bn and operating profit to more than R200m.
The group plans to grow its revenue to over R5bn and operating profit close to R1bn over the next three years.
“There are many significant opportunities in the consumer goods sector. Our acquisition model allows entrepreneurs to benefit from our future listing and this attracts good businesses to Bounty,” Rabe said.
Bounty Brands is armed with experts in the retail sector, such as former Pick n Pay chief executive Nick Badminton, who is the non-executive chairman; as well as a former director of one of AVI’s divisions, Peter Spinks, who will be the group’s chief financial officer.
Bounty Brands will be divided into the following categories: clothing and footwear – known as Bounty Wear; personal care, cosmetics, skincare and household brands – known as Bounty Home & Care; and food and beverages, known as Bounty Foods.