Sekunjalo acquires stake in Pioneer

Sekunjalo Investments Limited (SKJ) has acquired a stake in Pioneer Foods Group Limited (PFG) worth more than R95million. This represents 0.75% of the listed Pioneer Foods.

According to Sekunjalo's CEO, Khalid Abdulla, the deal is significant for Sekunjalo and is perfectly aligned with the company's strategy to diversify its business and enhance value through strategic and operational investments in key sectors of the economy.

Abdulla says Sekunjalo has considered investing in the food sector for some time.

"We believe the food sector will achieve significant growth over the medium to long term," says Abdulla. "One of Sekunjalo's other food sector investments is Premier Fishing SA (Pty) Limited, which recently posted strong results during the last financial period.

As an investments holding company, "Our investment in Pioneer Foods will not only complement our food portfolio but also complement our interests in the ICT, marine, healthcare, telecommunications and industrial sectors - all key growth sectors of the economy."

Abdulla says Pioneer Foods is a significant player in the food sector, not only in SA, but in southern Africa. It is also a notable exporter. "Pioneer Foods has strong product lines including Bokomo, Ceres, Heinz etc. and consistently generates strong earnings and cash," according to Abdulla.

After posting strong results for 2010 and 2011, Abdulla stated that Sekunjalo will continue its strategy of pursuing strategic acquisitions as a partner of choice.

The company's efforts in this regard are ongoing, according to Abdulla. Over the past three years Sekunjalo successfully acquired stakes in British Telecoms (BT) and Swedish multinational company SAAB SA. Sekunjalo recently received a maiden dividend of R13m from our strategic investment in BT.

"This strategic investment, among others also compliments and builds on our successes of existing businesses, strategic holdings as well as the success in our operational businesses.

"A key strategy is positioning Sekunjalo as a partner of choice. Key to the success of this strategy is our ability to add value to our existing business as well as the businesses we invest in," says Abdulla. Sekunjalo's executives sit on the boards of SAAB, BT and Pioneer Foods.

Abdulla also says "this deal firmly entrenches our position and paves the way for Sekunjalo to pursue interests to grow the asset base as well as increasing the company's networks."

Sekunjalo acquired the stake at a 5% discount of the market price under a special arrangement as part of Pioneer Foods B-BBEE strategy. Under the scheme there is a lock-in period. The deal is 90% vendor-financed with Sekunjalo funding the balance.

"We are proud of our new acquisition and proud to be part of the Pioneer Foods Group" says Abdulla.