Woolworths Holdings Limited (WHL) has announced its intention to acquire 100% of the shares in privately-owned prepared foods manufacturer in2food, from the founders, Old Mutual Private Equity (part of Old Mutual Alternative Investments Proprietary Limited), and other exiting shareholders.
In2Food is a South Africa-based supplier of convenience foods and one of Woolworths Foods’ most significant suppliers.
In2Food generates revenue in excess of R5bn per annum through its diversified range of premium private label products across freshly prepared convenience food, fresh produce, and long-life categories, as well as several ambient and bakery products.
Woolworths Food is in2food’s largest customer, with the balance of its customers comprising other local and international companies across the food service and wholesale channels.
Woolworths Group CEO Roy Bagattini said: “Woolworths and in2food share a more than three-decade history of partnership in creating products of outstanding quality and innovation to meet the evolving needs of our customers. This acquisition represents a compelling opportunity to bring a key strategic capability closer to the Woolworths Foods business, strengthening one of the core points of differentiation in our premium food offering.”
In2Food has an experienced senior leadership team with deep, multidisciplinary expertise across the food sector. The management team will continue to lead in2food as a standalone operating business within Woolworths, ensuring continuity of operations while preserving the entrepreneurial culture that has underpinned its success.
“Woolworths and in2food have an extended track record of close collaboration, focused on delivering high-quality, innovative food products aligned with Woolworths Foods’ premium positioning,” said Richard Cooper, CEO of in2food.
“The transaction further enhances Woolworths Foods’ ability to protect product quality, innovation and availability, which are core to its differentiated customer proposition. We look forward to further deepening our decades-long connection with Woolworths, and to continue to put innovation, value and quality at the centre of the Woolies Food journey.”
“This transaction brings to a conclusion the more than three-decade-long partnership with Old Mutual Private Equity and the other exiting shareholders. We would like to thank the outgoing shareholders for being very supportive partners, contributing meaningfully to the commercial rigour applied to key decisions along in2Food’s growth journey since 2015,” continued Cooper.
Bagattini emphasised that the acquisition does not signal a change in Woolworths’ broader food sourcing model.
“Our unique relationship with our suppliers is what differentiates us, and is fundamental to delivering our premium food offering. This transaction further enhances the relationship we have with one of our most innovative suppliers, and will extend mutual benefits to our entire value chain and end-customers.”
It is anticipated that the acquisition will be earnings accretive to the Woolworths group, even prior to the benefit of envisaged operational efficiencies, which will be realised over time.
The purchase consideration will be settled in cash, utilising the group’s existing financing facilities. The conclusion of the transaction is subject to the fulfilment of both regulatory and commercial suspensive conditions customary of a transaction of this nature, including the approval by the competition authorities of South Africa.
