India-listed Varun Beverages Limited (“VBL”), the largest PepsiCo bottler outside of the USA and China, entered into an agreement to acquire 100% of the shares in The Beverage Company Proprietary Limited (“BevCo”). RMB acted as sole financial advisor to BevCo and selling shareholders, including a Private Equity Fund managed by The Rohatyn Group (post the completed merger of Ethos Private Equity with The Rohatyn Group in April 2023) and Nedbank Private Equity, in a deal with an enterprise value of R3 billion.
BevCo, is one of the largest carbonated soft drinks producers in Southern Africa. Their portfolio consists of the recognisable brands Jive, Coo-ee and Reboost. BevCo also bottles and distributes PepsiCo-branded non-alcoholic beverages in South Africa and has five manufacturing facilities in the country, in addition to operations in Lesotho, Eswatini, Namibia, and Botswana.
“Having invested in 2017, The Rohatyn Group’s Africa Private Equity team together with our partners and the management team have built a focused non-alcoholic beverage platform. We executed our original investment thesis over a seven-year period and today the consolidated BevCo is in excess of three times the size and continues to grow its market share organically. VBL brings significant resources and expertise to invest in BevCo’s product offering and grow PepsiCo’s brands in Southern Africa, while expanding their presence on the continent,” says Glynn Potgieter, Managing Director at The Rohatyn Group.
There are always multiple challenges with cross-border transactions, in this instance including the requirement for compliance with both the Indian Stock Exchange and South African regulations. Regulation in India required a restructure of the BevCo group as well as the transfer of its debt facilities and subsequent deregistration/liquidation of more than ten entities within the group structure. This had implications on what would normally be a standard warranty and indemnity insurance policy. The transaction showcases RMB’s advisory capability in successfully navigating complex cross-border transactions and ability to access international buyers for high quality South African assets.
In addition to the corporate finance advisory role to BevCo, RMB’s South African and India teams assisted with refinancing the existing debt within BevCo as well as providing incremental acquisition finance for the transaction, in addition to facilitating the flows and foreign exchange conversion for the deal. This demonstrates RMB’s expertise and comprehensive solutions offering across the Indo-Africa corridor. With a footprint and expertise based both in South Africa and India, RMB can support clients on both sides of the corridor to enable seamless end-to-end transactions.
“The Indian market reacted extremely positively with VBL’s share price increasing in excess of 10% and reaching an all-time high on the day the transaction was announced. The transaction represents a significant investment and an important vote of confidence in South Africa by a large global player in the sector,” says Gareth Armstrong, Corporate Finance Executive at RMB.
Wolf Tribune
Vusi Thembekwayo – CEO of Motiv8, and Founder of The Inspiration Project, My Growth Fund and Iconoclast: At 25, Vusi Thembekwayo served on the operations board of Metcash Africa. He was tasked with launching a new division, which he built into a R461 million turnover business. He then left to launch his own business in 2013, Motiv8 his own consulting business, which he bootstrapped with speaking engagements. \”In my experience, the only way to succeed is to invest time in your own development and have \”skin in the game.\’ Time enables you to build technical ability and establishes your credibility in the market,\” says Thembekwayo. He went on to become one of the \”dragons\’ on the South African edition of Dragons\’ Den, where he was responsible for allocation over R10 million worth of investment, as well as one of the \”sharks\’ on M-Net\’s Shark Tank. In 2011, he co-founded Watermark Capital Partners, a private equity firm. In 2013, he was appointed non-executive director at RBA Holdings Ltd. In 2014, he founded The Inspiration Project, a tech enabled narrative lab reshaping the story of Africa, qualified to join the National Speakers Association of New York, and founded My Growth Fund, a fund to support business people as they start, build and grow their businesses. In 2015, he founded Iconoclast, a boutique specialist public speaker representation management agency.