JSE-listed Clover has acquired a 51% stake in Frankie’s Olde Soft Drinks, resulting in the establishment of a new business, Clover Frankie’s.
The new company would manufacture, sell, market and distribute a range of carbonated soft drinks, hot chocolate powder and lollies using the Clover and Frankie’s trademarks.
Clover had the option to acquire the remaining issued share capital in future at a purchase price to be calculated using an already agreed formula.
The transaction was in line with Clover’s stated strategy to expand its portfolio of value-added and branded consumer products and provided a niche platform to entering the carbonated soft drinks market, as well as the possible extension to other product categories.
“Frankie’s is a much loved brand and a unique concept – consumers identify with its ‘good old fashioned’ values, unique taste and distinctive brand. Our collaboration with Frankie’s allows us to do so measuredly through a manufacturer uniquely positioned between niche and every day soft drinks,” Clover CEO Johann Vorster said.
Frankie’s co-founder Mike Schmidt added that the deal presented a significant opportunity for the Frankie’s brand.
“While on it was an emotionally tough decision to part with the brand that Paula Schmidt and I have spent the past nine years growing, we knew this was 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.”
Frankie’s currently outsourced its entire sales, merchandising and production function. With 80% of historical sales happening in Gauteng, KwaZulu-Natal and the Western Cape, Schmidt was confident that Clover Frankie’s would benefit from the wider national footprint, additional listings and sales and merchandising expertise in Clover’s distribution network.
“We are confident that, with access to capital and the financial backing of Clover, Frankie’s will be able to unlock the full potential of our positioning as a distinctive retro brand with unique flavours.”
The transaction was subject to the completion of due diligences and other customary suspensive conditions.