- In2Food supplies grocery chains with ready-made meals, snacks
- Investment to tap growing middle-class desire for convenience
Old Mutual Plc’s private equity unit bought a stake in In2Food, a maker of ready-made meals and snacks in South Africa, as the investor bets on an increasing appetite for convenience products among the country’s growing middle class.
The asset manager paid between 200 million rand ($12 million) and 600 million rand for a “significant minority stake” in the company that makes private-label products for grocery chains, Jacci Myburgh, Old Mutual’s head of private equity, said Wednesday by phone from Cape Town. Myburgh said he couldn’t be more specific because of confidentiality agreements.
The investment takes spending by Old Mutual’s 4 billion-rand Fund IV to just beyond the half-way mark, Myburgh said. The deal follows the purchase last month of a majority stake in MoreCorp, South Africa’s largest golf-equipment retailer, as the unit focuses on an expanding higher-end consumer class. Old Mutual has already profited from the food industry, buying and selling stakes in Foodcorp Ltd. and Libstar.
A further attraction of In2Food is the management team led by Chief Executive Officer Richard Cooper, who has about 30 years of consumer industry experience, Myburgh said. The food company, which already sells to the U.K., should benefit as a weaker rand boosts exports, even as a severe drought drives up production costs, he said.
“The sector will benefit from a tailwind driven primarily by a cash-rich but time-poor and health-conscious consumer,” Mohsin Cajee, a private equity investment principal, said on the same call.
In2Food was founded in Johannesburg in 2007 and employs 4,000 people at production plants around the country, including one on the outskirts of Cape Town, Myburgh said. It sells items ranging from packaged produce to soups and pizzas, according to its website.
(An earlier version of the story was corrected to show that Cooper has about 30 years of industry experience.)