Pick n Pay to buy Western Cape-based meat processing company
Fast-moving consumer goods retailer Pick n Pay has concluded an agreement to acquire the business operations of abattoir and meat processing and packaging company the Tomis group of companies for up to R340-million.
Tomis’ production facilities are situated in Wellington, in the Western Cape, and include a 15 000 m2 under-roof lamb feedlot, lamb and beef abattoirs and a meat packaging plant situated on a 140 ha farm. Tomis employs about 320 people.
Meat and butchery is a key product category for both Pick n Pay and Pick n Pay QualiSave under the group’s Ekuseni strategy. The acquisition will significantly enhance the retailer’s fresh meat offering to customers, while providing the group with a number of benefits.
The first benefit is a higher-quality, more consistent red meat offering – a category that is a key element of Pick n Pay’s customer value proposition.
The acquisition also provides an enhanced ability to develop and roll out innovative, value-added products for customers, the retailer states.
It will also help to reduce red meat costs, unlocking the ability to give customers greater value.
This is in addition to centralised meat packaging, providing a more reliable supply, and unlocking synergies through the Pick n Pay group’s centralised supply chain distribution network.
Lastly, the acquisition provides sales growth opportunities, with the potential to supply Pick n Pay franchisees Boxer and other retailers and wholesalers.
The purchase price will be split into an upfront cash payment of R323-million and a fixed capped deferred price of R17-million payable on the third anniversary of the transaction.
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