Premier Group, the food and consumer product manufacturer that earlier this year postponed its listing, said on Friday that it would reinstate a listing on March 24, at an offer price of R53.82 per share, giving it a R6.9 billion equity valuation.
The group – which sells under brands such as Snowflake, Blue Ribbon, Lil-Lets and Mandla Mageu, and which manufacturers through 30 factory sites around the country – said in its pre-listing statement the offer price equated to a 6.3 times earnings multiple, based on earnings for the last 12 months to September 30, 2022.
Earlier plans to list had been postponed due to market turbulence. The initial offer will comprise an offer mainly to selected institutions, underwritten by current shareholders.
“Brait (the private equity firm that currently owns Premier) will receive proceeds of up to R3.6bn from the Offer, which, with its share of the November 2022 pre-listing distribution of R950 million, totals R4.6bn, before fees and expenses,” the group said. The funds will be used to address Pemier’s existing shareholder Brait’s liquidity requirements.
The listing had been de-risked by Titan Premier Investments and Brait agreeing to buy 36.2% of the offer shares.
Pre-Launch commitments had been sourced from various institutions, which, with existing public shareholders and other parties’ commitments, would meet the free-float requirements of JSE listings requirements.
Pre-launch commitments had been received – from ABAX, Allan Gray for its clients, Laurium, Mergence and Steyn Capital – for R1.34bn of the offer.
Titan, owned by Christo Wiese, would also underwrite offer shares not taken up, up to R832m, at the offer price.
The main purposes of listing is to enable Brait to realise a portion of its investment in Premier, and reduce gearing and much of the need for Brait to sell any more shares into the market.
Brait intends to unbundle its remaining shares in due course.
The listing also gives Premier access to capital markets, and provides shareholders with a liquid public market on which to trade their shares.
Brait is expected to retain 47.1% of the shares in issue after the offer is implemented.
Premier said its financial performance was good over the past three financial years, with a revenue compound annual growth rate (CAGR) of over 15%, strengthening margins driven by volume and market share growth, and operational efficiencies. Adjusted earnings before interest, tax depreciation and amortisation increased 20% CAGR over the three years.
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