Brait PLC, the investment holding company listed in Luxembourg and Johannesburg, finally revealed details on Monday 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.
The announcement saw Brait’s stock price trading around 7% stronger in morning trade on the JSE. It is the controlling shareholder in Premier Group through its Brait Mauritius Limited subsidiary.
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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.
IPO info
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 twelve 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,” it added.
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Brait said it has already secured irrevocable agreements with Titan Premier Investments Proprietary Limited as well as an institutional investor to purchase 38.6% of the offer shares.
Titan has agreed to buy 36.2% of the offer shares, while the institutional investor has committed to purchasing 2.4%.
“In addition, Titan and Rand Merchant Bank, a division of FirstRand Bank Limited have committed to underwrite R2.9 billion and R0.5 billion respectively at the bottom of the price range [R53.82 per offer share).”
According to Premier, the group reported revenue of R14.5 billion for the year ended 31 March 2022 (FY2022) which represented 16.1% growth over the prior year.
“This strong performance has continued for the six months ended 30 September 2022, where revenue grew by 23.9% on the prior interim period,” it said in a statement on its website.
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