Photo by: Duane Daws
Rhodes Food Group Holdings (RFG) has advised shareholders that its wholly owned subsidiary Rhodes Food Group will acquire the Foodservice business of General Mills for an undisclosed amount, on November 30.
Under the agreement, dated September 30, the implementation of the acquisition was not subject to any conditions precedent.
The RFG board said the acquisition presented an attractive investment opportunity, aligned with the company’s strategy of expanding its business operations through value-accretive acquisitions, RFG said in a statement on Thursday.
“The board believes that the frozen bakery category complements RFG’s growing pie and pastries business, particularly with its focus on the distribution of these products to the convenience channel, and that good synergies will arise from the acquisition.”
General Mills launched its Foodservice business in 1995 and currently conducted its manufacturing business from a highly automated facility in Johannesburg. Its products, a range of dry and frozen bakery products, were distributed nationally, primarily to the convenience channel.
These products included tubeset muffin batters, croissants, cinnamon scrolls, place-and-bake frozen preformed cookies, frozen pizzas, dry bakery mixes and ready-to-eat muffins.
“Through the offering of innovative products, combined with convenience and ease of preparation, this business has become the preferred supplier and leader in muffins to the South African food service market,” RFG explained, highlighting that the muffin batters and muffins were by far the most significant sales item.
The Foodservice business of General Mills generated revenue in excess of R65-million in its financial year ending May 31.