Consumer packaged goods producer and supplier Libstar on Wednesday started trading on the main board of the JSE, in the food products sector.
Three-million Libstar shares traded on the opening of trade.
The proceeds from the listing will aid the company’s growth prospects and provide access to additional capital for capacity and capability expansions. Libstar also aims to improve its margins and grow organically.
JSE capital markets director Donna Nemer commented that the listing brings the total number of companies listed in the food products sector on the JSE to eight.
The sector has a total market capitalisation of about R159-billion and contributes 1.1% to the JSE’s overall market capitalisation.
Libstar co-founder and CEO Andries van Rensburg reported that, ahead of the listing, the company had raised R1.5-billion through an initial public offering (IPO) of 243.5-million shares at an offer price of R12.50 a share.
Including the sale of shares from existing shareholders such as buyout firm Abraaj and the Public Investment Corporation, the IPO raised a further R1.5-billion.
Libstar operates 27 business units across South Africa and owns brands including Denny, Cook & Bake, Lancewood, Cape Herb and Goldcrest. The company was established in 2005 and generated revenue of R8.83-billion in 2017, with earnings before interest, taxes, depreciation and amortisation at R940-million.
“We had the idea that it was going to be a compact manufacturing company, but after our first acquisition of Mrs Balls in 2006 – subsequently sold to Tiger Brands in 2012 – the ball kept on rolling,” said Van Rensburg.
Libstar has become one of the largest food and personal care manufacturers in South Africa.
Libstar’s biggest customers include Woolworths, Shoprite Checkers, Pick ‘n Pay, McDonald’s and Spar, which accounted for 55% of the group’s revenue in 2017.
Libstar, through its business unit Rialto, is the exclusive importer of brands including Tabasco, Kikkoman, Kiri, Laughing Cow and Lurpak.
Libstar co-founder and FD Robin Smith commented that introducing Libstar to the public markets will enable the company to augment its growth strategy and strengthen its market position in a number of areas.
“Libstar has a strong record of growth and financial performance, and is well positioned to capitalise on the opportunities that lie ahead for the future development of the company,” he concluded.