Zimbabwe Stock Exchange-listed company National Foods is set to expand its product portfolio through the acquisition of a significant stake in a dairy and juice company. Natfoods is set to acquire a 50 percent stake in Pangolin Products, a company formed by Probrands directors. Three Probrands directors – Mr Neil Philp, Mr Calum Philp and Mr Tidings Chimpondah – formed the company with a view of focusing on the production of long-life milk.
Natfoods chief executive Mr Mike Lashbrook confirmed the transaction yesterday but could not provide finer details.
“Natfoods proposes to make an investment into the dairy, juice and candle categories and the investment is currently being reviewed by the relevant regulatory bodies and consequently at this point we can only provide a broad outline of the transaction,” said Mr Lashbrook.
He said the proposed transaction presents an exciting opportunity for Natfoods to expand its existing product portfolio and, in particular, to reduce the nation’s dependency on imported products.
Natfoods plans to invest into the company as a way of business diversification with Pangolin set to invest into the production of the long-life milk focusing on creating employment and diversifying revenue streams.
Long-life milk has a 38 percent share of the liquid milk market.
Mr Philp confirmed the development but refused to disclose finer details of the transaction.
“Yes, I can confirm that the transaction is between shareholders of Probrands and National Foods where Natfoods will acquire a significant shareholding in Pangolin Products (Private) Limited.
The transaction is ongoing and I cannot provide any details for now,” said Mr Philp.
The transaction comes after the Competition and Tariffs Commission rejected plans by another Innscor subsidiary Irvine’s Zimbabwe to acquire a 59 percent shareholding in Probrands.
Sources close to the transaction said Innscor has been resilient in trying to make an investment in ProGroup Holdings.
At Natfoods last annual general meeting, Mr Lashbrook hinted on new investments. He said the group had investigated potential investments into a number of new categories with the objective of generating increased contribution of the existing services platform.
Mr Lashbrook said the company had a strong financial position that can drive growth with then meeting chair Mr John Koumidis noting that the group compounded average growth rate at profit before tax level was 29 percent largely driven by an increase in volumes sold.
The acquisition ties in well with Innscor’s strategy of pushing for acquisition. Chief executive Toni Fourie recently said that Innscor will announce three acquisitions. He said one of the acquisitions will complement a business line already existent within the conglomerate while another will bring diversity, all adding to the group’s integration structures.