PwC case study: Acquisition of Langeberg & Ashton Foods
PwC Deals supports consortium acquisition of Langeberg & Ashton Foods.
By Tertius van Dijk, Director | Transaction Services, PwC South Africa
PwC Deals supports consortium acquisition of Langeberg & Ashton Foods (L&AF), helping safeguard approximately 3,000 jobs in Ashton in the Western Cape.
Tiger Brands Limited is a South African packaged goods company, listed on the JSE. In addition to the company’s South African operations, Tiger Brands has direct and indirect interests in international food businesses in South America and the rest of Africa. It is South Africa’s largest foods group.
L&AF, a division of Tiger Brands, has been a leader in the global market for canned deciduous fruit for over 60 years. L&AF is based in and by far the largest employer in the town of Ashton in the Western Cape with the majority of produce sourced within a 120km radius.
A consortium of buyers consisting of the Ashton Fruit Producers Agricultural Co-operative, the Langeberg Community Trust, established with R150 million funding support from Tiger Brands, and the Norwegian Development Fund for Emerging Markets (Norfund) has acquired the L&AF operations from Tiger Brands reflecting the consortium’s commitment to the fruit industry in the Breede River Valley and its people.
The dividends and benefits from the 10% stake held by the Langeberg Community Trust will be used to support socio-economic development in the broader Langeberg region.
Solution
How we helped
We acted as a financial advisor to the buyers in the transaction, with a focus on financial due diligence (FDD) services, which we embraced given the significant societal impact on the transaction. We successfully delivered on our scope of work, fulfilling our clients’ needs.
Other advisors performed valuations, ESG and technical due diligence. In collaboration with them, we identified several value-adding opportunities and provided insights to our clients by leveraging the capabilities of our ADA team to deliver big data insights, guidance on separation considerations and value creation opportunities post deal.
Impact
Sustained outcomes
We leveraged the expertise of our ADA team to test specific deal hypotheses around:
the effectiveness of SKU rationalisation,
product level profit margins, and
customer churn trends.
The deal hypotheses were used to inform not only the transaction, but also the new standalone business’s management team going forward. We presented our findings through dynamic visualisation tools (the PwC Junction platform) to better understand the levers that impact the business’s performance and the hypotheses.
Our FDD team further identified key deal issues that were addressed as part of the Sale and Purchase Agreement to better protect the interests of our clients.
Our integrated approach using various PwC specialist teams helped us deliver a sustained outcome to our clients and the town of Ashton. With the successful conclusion of this transaction, around 3,000 jobs have been saved, which adds significant momentum to the economy of the town of Ashton and the Western Cape.
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Contact us
Tertius van Dijk
Director | Transaction Services, PwC South Africa
Email: tertius.van.dijk@pwc.com
LinkedIn: https://www.linkedin.com/in/tertius-van-dijk-145a3779/