South African retailer Woolworths has agreed to acquire In2Food, a private-label supplier of ready meals, bakery, snacks and drinks.
The grocer is buying the business through its Woolworths Foods unit from investor Old Mutual Private Equity, which is part of Cape Town-based Old Mutual Alternative Investments.
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Financial terms were not disclosed in a Woolworths’ filing with the Johannesburg stock exchange today (17 March). The transaction is subject to regulatory approval, including from South Africa’s competition authority.
In2Food has been an existing supplier to Woolworths for more than 30 years and generates revenue of R5bn ($298.4m) a year. It also supplies fresh fruit and veg, seafood and fruit juices.
Woolworths said the deal will “strengthen its supply chain resilience and further differentiate its premium food offering”.
At the same time, it will give the retailer “greater agility and efficiencies in the supply chain resulting in improved speed-to market”, while boosting its innovation capabilities.
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By GlobalDataWoolworths added In2Food will provide “new opportunities for accelerated growth in non-competing revenue streams”, particularly in foodservice where the acquired business also operates.
In2Food, which acknowledged the Woolworths’ transaction on LinkedIn, runs eight manufacturing facilities in South Africa, according to the filing.
The management team at In2Food, which counts Woolworths as its largest customer, will remain in place.
Old Mutual Alternative Investments had not responded to Just Food’s request for comment on the sale of In2Food at the timing of writing and the reasons for the disposal.
The investor acquired a “significant minority” interest in In2Food in 2016 but it is unclear if that stake was ever increased.
In2Food emerged in its current form in 2010 from the merger of the South African companies Interfruit and Lombardi Foods. The latter was already a supplier to Woolworths at the time of that transaction.
It went on to expand the business through M&A, acquiring fruit supplier Spring Valley Bapsfontien, Compass Bakery and Newport Juices over 2013 and 2014, according to In2Food’s website.
Strawberry business Echo Berry and Nibbly Bits in snacks and bakery were added to the portfolio in 2016.
