South Africa’s RCL Foods has struck a deal to acquire local pet-food business Martin and Martin.
RCL Foods is to pay Simrose Overseas R695m ($42.3m) for the Cape Town-based firm, which trades as Bob Martin.
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The pet-food side of RCL Foods’ business focuses on dry products and the acquisition expands the company’s product range in areas including wet pet food and treats.
Martin and Martin’s brand stable includes Husky, Pamper, Beeno, and Bob Martin.
RCL Foods, which owns consumer food brands including Supreme flour and Nola mayonnaise, said the “attractive growth prospects” of pet food make the area of “strategic importance” for the business. The company’s own range of pet food includes the brands Bobtail and Canine Cuisine.
The deal will not result in job losses, with no immediate changes for employees, the companies said in a joint statement.
Paul Cruickshank, the CEO of RCL Foods, said: “This acquisition represents an exciting opportunity to broaden our participation in the pet-food category and accelerate our presence in high-growth segments where we currently have limited exposure. By bringing together the complementary capabilities of RCL Foods and Martin and Martin, we are positioning ourselves to deliver greater innovation, relevance and value to customers, while building a stronger, more sustainable pet-food portfolio for the future.”
The deal comes a month after RCL Foods recalled batches of pet food after a theft of condemned dry products that had been sent to a waste-management site but then sold on the informal market.
At the time, RCL Foods said the situation led the company to make further checks on potentially contaminated products that had been designated for destruction and it found some batches had appeared in the formal trade.
As of 31 December 2024, Martin and Martin reported net assets of R54.5m, profits after tax of R23.3m, and EBITDA of R75.2m, RCL Foods said.
The completion of the acquisition remains subject to conditions that include approval from competition authorities.
Brendan Hayes, the managing director of Martin and Martin, said: “We are excited about the strong synergies this partnership would bring, enabling us to serve the market with a broader range of innovative products.”
RCL Foods reported a 1.9% decrease in revenue from continuing operations to R13.3bn for the six months ended December. Pet-food volumes grew 2.2%.
The company booked a 24.6% year-on-year decrease in EBITDA from continuing operations to R1.17bn.
Total earnings per share (EPS) were down 43.8% to 75.9 cents, while total headline earnings per share (HEPS) and HEPS from continuing operations slid 30.6% to 75.9 cents.
