South African Consumer Firm Libstar Plans $124 Million IPO

JOHANNESBURG (Capital Markets in Africa) – Libstar Holdings Pty Ltd., the South African food and household products maker, plans to raise about 1.5 billion rand ($124 million) to repay debt and fund expansion by selling new shares on the Johannesburg Stock Exchange.

Existing shareholders in the Johannesburg-based company, including Abraaj Group Ltd., which holds about 71 percent, will also sell undisclosed stakes, the company said in a statement Monday.

“The capital that we raise from the listing will support our growth prospects and allow us to, among other things, invest further in our categories and manufacturing facilities,” Chief Executive Officer Andries van Rensburg said in the statement. The company expects to pay as much as 40 percent of after-tax profit in dividends after the listing.

The company is targeting a 40 percent free float. Management will remain materially invested in Libstar with a stake of almost 10 percent, van Rensburg said. South Africa’s Public Investment Corp., which manages the bulk of the pension savings of the country’s government workers, holds 19.4 percent.

Libstar will undertake an investor roadshow to determine the offer price of the shares, according to the company.

The company is one of the largest unlisted food and personal care manufacturers in South Africa and employs about 6,700 people, according to Abraaj’s website. Founded in 2005 as an investment holding company, it targets firms in the consumer-goods sector. Abraaj’s acquisition of a controlling stake in 2014 helped the company expand into the Middle East and other parts of Africa.

Libstar’s annualized net revenue is more than 8.8 billion rand and it operates 27 business units across five of South Africa’s nine provinces, according to information contained in the listing notification. Libstar is now in the final marketing phase of the initial public offering and expects to list within the next two months, van Rensburg said in response to emailed questions.

Standard Bank Group Ltd. and J.P. Morgan Chase & Co. are joint global coordinators and bookrunners for the listing.

Source: Bloomberg Business News