Clover Industries, the South African dairy group, is be the majority shareholder in a venture with local drinks company Frankie’s Olde Soft Drinks.
The new business, Clover Frankie's, will see the yoghurt maker enter soft drinks, hot chocolate powder and lollies for the first time. Clover will own 51% of Clover Frankie's, with Frankie’s retaining the balance. Clover has the option to acquire the remaining issued share capital in future at a pre-agreed price.
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Clover said the deal, struck for an undisclosed sum, was part of its strategy to expand its portfolio of "value-added and branded consumer products". It said the transaction would give the business "a niche platform to entering the carbonated soft drinks market as well as the possible extension to other product categories".
The venture plans to market a range of carbonated soft drinks, hot chocolate powder and lollies using the Clover and Frankie's trademarks.
"Frankie’s is a much loved brand and a unique concept – consumers identify with its good old fashioned values, unique taste and distinctive brand," said Clover chief executive Johann Vorster. "Apart from the brand synergies, this acquisition provides Clover with an important platform from which to launch into carbonated soft drinks and other value added branded ranges. Our collaboration with Frankie’s allows us to do so measuredly through a manufacturer uniquely positioned between niche and every day soft drinks."
Frankie's was set up by husband and wife Mike and Paula Schmidt in 2006. Mr Schmidt said: "This deal represents a huge opportunity for the Frankie's brand. Whilst on one hand it was an emotionally tough decision to part with the brand that Paula and I have spent the past nine years growing, on the other we knew that this was absolutely the right thing and more importantly the right time to do this deal. As shareholders in Clover Frankie's we are very confident that the brand will retain its unique character and will continue to grow from strength to strength.
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By GlobalData"Currently Frankie’s outsources its entire sales, merchandising and production function. With 80% of historical sales happening in Gauteng, KwaZulu-Natal and the Western Cape, we are confident that Clover Frankie's will benefit tremendously from the wider national footprint, additional listings and sales and merchandising expertise in Clover’s distribution network."
