Milco consortium offers $359m to acquire South Africa’s Clover

04-Feb-2019 - Last updated on 04-Feb-2019 at 11:33 GMT

Clover is a branded consumer goods and products group operating in South Africa and other African countries with a range of value-added dairy and non-dairy products.

South African food and beverage company Clover Industries Limited said it has entered into an implementation agreement with Milco SA Proprietary Limited, in terms of which Milco will make an offer to acquire all of the issued shares in Clover on a fully diluted basis.

Milco plans to delist the company from the Johannesburg Stock Exchange (JSE).

The amount payable in terms of the scheme will be a cash consideration of R25.00 per Clover share, which translates to a value for the company of $358.6m.

Clover, which has more than 8,500 employees, is a branded consumer goods and products group operating in South Africa and other African countries with a range of value-added dairy and non-dairy products. Clover has one of the largest ambient and chilled distribution networks in Southern Africa.

The company's segments include: dairy fluids, dairy concentrated products, ingredients, non-alcoholic beverages, fermented products and other products.

Consortium share breakdown

Approximately 78.7% of the shares will be held by Milco Mauritius International Limited, a Mauritian holding company, the Milco shareholding of which will, in turn, be effectively held c.59.5% by International Beer Breweries Limited (IBBL), c.8.3% by IncuBev Limited and c.10.9% by Ploughshare Investments Limited; 15% by Brimstone Investment Corporation Limited; and c.6.3% by the executive management of Clover.

Companies involved

IBBL is a directly-owned subsidiary of the Central Bottling Company (CBC) Group. CBC is a privately-owned international food and beverage group whose subsidiary companies serve more than 160m consumers worldwide.

CBC is Israel's leading manufacturer and distributor of beverages, and, through its foreign subsidiaries, has manufacturing and distribution operations in Turkey, Romania, and Uzbekistan.

CBC, which is also the owner of the Tara dairy, Israel's second largest milk processing dairy, produces and distributes its own brands and Müller brands, and it operates the license for the Müller brand in Romania.

CBC also owns Gat Foods, a "grove to table" juice operation with customers in over 70 countries. In addition, CBC works with its international franchisors, including The Coca-Cola Company, Carlsberg, Anheuser-Busch InBev, the Müller Group and Diageo.

IncuBev is an international business focused on the food and beverage sectors in sub-Saharan Africa.

Ploughshare is a privately owned, independent investment company which is part of a broader international investment group with investments and expertise in retail, distribution and beverages.

Brimstone, established in 1995 and listed on the JSE, is an investment company incorporated and domiciled in South Africa.

Brimstone employs more than 3,500 employees in its subsidiaries and more than 24,000 employees in its associates.

It has investment expertise in industries such as fast-moving consumer goods, health care and financial services, amongst others.

Milco said it “has strong faith in management as evidenced by the track record of the business and will look to support them and the company in their growth plans.”

Milco added it is confident that the continuity and achievement of Clover's business plans is assured by its ability to retain, post-completion of the deal, the management, and that it brings “significant operational, technical and financial capacity to support Clover's growth strategy in sub-Saharan Africa.”