South Africa’s RCL Foods has reached an agreement to acquire local pet food company Martin and Martin.
RCL Foods will pay Simrose Overseas R695 million ($42.3 million) for the Cape Town-based company, which trades as Bob Martin.
The pet food part of RCL Foods’ business focuses on dry products and the acquisition expands the company’s product range in areas including wet pet foods and treats.
Martin and Martin’s stable of brands includes Husky, Pamper, Beeno and Bob Martin.
RCL Foods, which owns consumer food brands such as Supreme flour and Nola mayonnaise, said pet food’s “attractive growth prospects” make the area of ”strategic importance” to the business. The company’s own pet food range includes the Bobtail and Canine Cuisine brands.
The deal will not result in job losses or immediate changes for employees, the companies said in a joint statement.
Paul Cruickshank, CEO of RCL Foods, said: “This acquisition represents an exciting opportunity to expand our participation in the pet food category and accelerate our presence in high-growth segments where we currently have limited exposure. By bringing together the complementary capabilities of RCL Foods and Martin and Martin, we are positioning ourselves to deliver greater innovation, relevance and value to customers, while building a stronger and more sustainable pet food portfolio for the future.”
The deal comes a month after RCL Foods recalled batches of pet food following a theft of rejected dry products that had been sent to a waste management site but then sold on the informal market.
At the time, RCL Foods said the situation led the company to carry out further checks on potentially contaminated products that had been designated for destruction and discovered that some batches had appeared in formal trade.
As at December 31, 2024, Martin and Martin reported net assets of R54.5 million, profit after tax of R23.3 million and EBITDA of R75.2 million, RCL Foods said.
Completion of the acquisition remains subject to conditions including approval from competition authorities.
Brendan Hayes, managing director of Martin and Martin, said: “We are excited about the strong synergies this partnership will bring, allowing us to serve the market with a broader range of innovative products.”
RCL Foods reported a 1.9% decline in revenue from continuing operations to R13.3 billion for the half-year ended December. Pet food volumes grew 2.2%.
The company recorded a 24.6% year-on-year decline in EBITDA from continuing operations to R1.17 billion.
Total earnings per share (EPS) decreased 43.8% to 75.9 cents, while total earnings per share (HEPS) and HEPS from continuing operations fell 30.6% to 75.9 cents.