Sanlam Private Equity acquires stake in meat company
Sanlam Investments through its private equity business, Sanlam Private Equity (SPE), has acquired a majority stake in the Cavalier Group of Companies, a supplier of premium red meat products and the largest employer in the Cullinan region of Gauteng for an undisclosed amount.
Cavalier Group of Companies specialises in creating the shortest and most cost-effective route for red meat products from farm to fork. The Group consists of five entities: Cavalier Foods, Cavalier Livestock, Cavalier Abattoir, Cavalier Feeders and the holding company.
This deal is the first to close from the Investors Legacy Range’s Private Equity Fund, one of three impact funds launched in June 2020 with a collective goal of creating or preserving 27,000 South African jobs – while still delivering value for investors.
Cavalier, one of only two Woolworths-approved red meatpackers in South Africa, employs 1,412 staff. SPE has acquired a majority stake in Cavalier Group in a replacement capital transaction, acquiring the stakes from both the Land and Agricultural Development Bank of South Africa (Land Bank) and Griekwaland-wes Korporatief Bpk (GWK). The Land Bank shares were earmarked by the state-owned bank to be sold to an empowered equity partner to bring about much-needed transformation in this largely untransformed sector.
This investment by SPE comes at a time when the Cavalier Group had started embarking on various growth initiatives and when the business needed a strong and empowered equity partner to help it achieve its growth plans.
SPE managing partner, Paul Moeketsi, says Cavalier is a robust business with strong diversification and growth potential. ”As SPE, we partner with strong management teams, and we invest in businesses that have good growth prospects and where we believe our involvement will unlock additional value in the business. We were attracted to Cavalier Group because we believe that this business meets these requirements. While Cavalier Group holds supply contracts with major retailers in South Africa, new opportunities can include exporting products to the Middle East and supplying quick-service restaurants and hospitality businesses.”
Cavalier recently built a state-of-the-art meat processing, deboning and packing facility for its AAA-grade red meat business and is poised for growth. With its vertically integrated value chain and as the largest red meat co-packer in the country, Cavalier is strategically positioned to take advantage of several red meat opportunities in future. “We are excited to have a partner such as Sanlam Private Equity in our business. With their strong empowerment credentials and their strategic focus of helping businesses grow, we are confident that our partnership will be a very successful one in the future,” said Kabols Le Riche, CEO and founder of Cavalier Group.
Moeketsi says SPE expects to announce another deal from the Investors Legacy Range’s Private Equity Fund in the coming weeks.
Are you seeking private equity or venture capital investment to grow your company? Africa Private Equity News now offers you the opportunity to connect with investors backing African businesses. Contact us at editor@africaprivateequitynews.com for our rate card and more information.