Boxer, a wholly-owned subsidiary of the Pick n Pay Group, today published its pre-listing statement as it commences the process of listing on the Main Board of the Johannesburg Stock Exchange (JSE) on 28 November 2024. Boxer also plans to have a secondary listing on the A2X.
As part of the IPO, the Pick n Pay Group aims to raise between R8.0 billion and R8.5 billion through an offer of up to 202.4 million Boxer shares (around 40% of its total issued share capital) at a share price of between R42 and R54 per share (implying a total market capitalisation of between R21.1 billion and R24.7 billion). Pick n Pay expects to retain a majority stake in Boxer of approximately 60% to 65% post-IPO.
Boxer’s IPO is the second and final step of the two-step recapitalisation plan by Pick n Pay. The listing of South Africa’s fastest-growing grocery chain will allow investors to own a share of this successful retailer as it takes up its rightful place on the JSE, alongside the major retail players in South Africa.
Boxer Superstores is the pre-eminent discount grocery retailer in South Africa with an annual turnover of R37.4 billion and trading profit of R2.1 billion (FY2024) and a store estate of 489 (at August 2024). Boxer has a 47-year history and track record of consistent growth since Pick n Pay’s acquisition of the business in 2002 under the leadership of then-CEO Sean Summers, when it had just 35 stores and annual sales of R800 million.
Its ‘soft discounter’ proposition in the South African market has secured it a share of approximately 68% of the discount grocery retail market and an estimated market share of 4.2% of the formal grocery market, more than double that of its closest competitor, estimated at 1.8%.
Boxer grew its turnover at a South African market-leading CAGR of 18.6% between FY2022 and FY2024, with like-for-like growth of 7.7%, as a result of its compelling customer value proposition and accelerated store rollout programme.
One of Boxer’s strengths is its deep understanding of its customers across the lower-to-middle-income communities of South Africa and Eswatini. This deliberate and clear market positioning has enabled strong like-for-like sales growth over many years in very challenging circumstances. Its 3,000 essential food and grocery products, including high-quality fresh meat, produce, and baked goods, are focused on value while incorporating quality confined labels, currently contributing 19% to sales.
Boxer CEO Marek Masojada, who was part of the team that negotiated the sale of Boxer to Pick n Pay 22 years ago, says the business has been growing consistently, underpinned by a strong brand, unbelievable customer offer and an execution-focused team.
“Our turnover growth has been achieved in the most competitive of trading environments, reflecting the coming of age of the Boxer brand. The brand’s success is recognition of how we’ve served our customers, the robust business model we have built and most importantly, our ability to trade successfully against other competitors and formats.
“Boxer started off as more of a rural or smaller town operator in towns like Matubatuba, Nqutu, Ulundi, and Burgersfort. We continue to open stores in similar under-serviced towns and locations. However, we are now also in the major CBDs of Durban, Johannesburg, Tshwane, Mbombela, and Bloemfontein, as well as many townships across the country.”
Boxer has on average added a new store every week for the last 3 financial years and has experienced a 14% CAGR in store numbers over the same period. By the end of this financial year (FY25), it expects to add 65 new stores. The medium-to-long-term aim is to double its store footprint by opening 60 to 70 stores a year for the next six to seven years.
At the beginning of this year, Pick n Pay announced its two-step recapitalisation plan to strengthen the Pick n Pay Group’s balance sheet. Step one was completed three months ago, with its successful R4 billion Rights Offer being 106% oversubscribed, which saw the Pick n Pay Group returning to a positive equity position of R2.9bn. Step two is now underway, with the execution of the Boxer listing. Proceeds received from the Boxer IPO will be used by Pick n Pay to settle the Pick n Pay Group’s outstanding debt and to reinvest in the core Pick n Pay supermarket business.
Pick n Pay CEO Sean Summers said: “Boxer offers an unmatched customer offer, and this is evident in their incredible growth. Having been there when we bought Boxer, it is very exciting to see the business come full circle. The Boxer IPO will increase their profile and visibility, providing Boxer with access to a large pool of capital for growth. The IPO will clearly demonstrate the worth of the Boxer business, unlocking value for Pick n Pay shareholders over time. The initial capital raised from the listing will mean Pick n Pay will be debt-free, with a strong balance sheet and a significantly reduced interest bill, and in a position to accelerate its turnaround, driving long-term sustainable growth for all our shareholders.”
The future looks promising for Boxer as it is well-positioned to access both the formal and informal grocery market. Boxer intends to double its revenue over an estimated five-year horizon. It aims to maintain a steady pace in store rollouts, strong mid-single-digit like-for-like sales growth, and consistent profitability.
Participation by qualified investors in the offer for Boxer shares will open today, 11 November 2024, at 09:00 and close at 12:00 on Friday, 22 November 2024. The publication date of the final offer price and final number of offer shares will be released on Monday 25 November and Boxer will officially list on 28 November 2024. Full details of the Offer are set out in the Pre-Listing Statement available on both the Boxer (www.boxerinvestor.co.za) and Pick n Pay (www.picknpayinvestor.co.za Investor Relations websites.
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DISCLAIMER
Forward looking statements
This announcement contains certain forward-looking statements which relate to the Boxer Group’s possible future actions, including the offer of its shares and admission on the main board of the JSE (collectively, the “Offer”). All forward- looking statements are solely based on the views and considerations of Boxer, and in particular as at the date hereof. These statements involve risk and uncertainty as they relate to events and depend on circumstance that may or may not occur in the future. Boxer does not undertake to update or revise any of these forward-looking statements publicly, whether to reflect new information, future events or otherwise. These forward-looking statements have not been reviewed or reported on by Boxer’s or Pick n Pay’s external auditors.
Each of Boxer and the Pick n Pay Group and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.
Important information
The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.
This announcement does not, and is not intended to, constitute or form part of any offer, or invitation for or solicitation of any offer, to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of, or issue, any security in any jurisdiction, nor shall it or any part of it form the basis of, or be relied on in connection with, any agreement or commitment whatsoever in any jurisdiction, (including, without limitation, South Africa, Australia, Canada, Japan, the United Kingdom, the United States of America (including its territories and possessions, any State of the United States and the District of Columbia) or any member state of the European Economic Area). The Offer referred to in this announcement will be implemented pursuant to the re-listing statement issued by Boxer in connection therewith (“Pre-Listing Statement”).
This announcement is not the Pre-Listing Statement and does not contain all of the information required for a pre-listing statement prepared in accordance with the relevant disclosure requirements under the JSE Listings Requirements. This announcement is not for release, publication, or distribution, directly or indirectly, in or into any jurisdiction outside of South Africa (including, without limitation, Australia, Canada, Japan, the United Kingdom, the United States (including its territories and possessions, any State of the United States and the District of Columbia) or any member state of the European Economic Area) if such distribution is restricted or prohibited by, or would constitute a violation of, the relevant laws or regulations of such jurisdiction. If the distribution of this announcement and any accompanying documentation in or into any jurisdiction outside of South Africa is restricted or prohibited by, or would constitute a violation of, the laws or regulations of any such jurisdiction, such document is deemed to have been sent for information purposes only and should not be copied or redistributed. Further, any persons who are subject to the laws of any jurisdiction other than South Africa should inform themselves about, and observe, any applicable requirements or restrictions. Any failure to comply with the applicable requirements or restrictions may constitute a violation of the securities laws of any such jurisdiction.
The contents of this announcement have not been reviewed by any regulatory authority. This announcement does not take into account the investment objectives, financial situation or needs of any particular person. Further, the contents of this announcement do not constitute legal advice or purport to comprehensively deal with the legal, regulatory and tax implications of the Offer for any potential investor. Recipients are accordingly advised to consult their professional advisors about their personal legal, regulatory and tax positions regarding the matters contained in this announcement.
This announcement does not constitute or form a part of any offer or solicitation or advertisement to purchase and/or subscribe for shares in South Africa, including an offer to the public for the sale of, or subscription for, or the solicitation of an offer to buy and/or subscribe for, shares as defined in the Companies Act, No. 71 of 2008, as amended (“Companies Act”) or otherwise and will not be distributed to any person in South Africa in any manner that could be construed as an offer to the public in terms of the Companies Act. Accordingly, this announcement does not constitute a “registered prospectus” or an “advertisement” relating to an “offer to the public”, as contemplated by the Companies Act. No prospectus has been, or will be, filed with the South African Companies and Intellectual Property Commission in respect of this information.
In South Africa this announcement is directed only at (i) persons falling within the exemptions set out in section 96(1)(a) of the Companies Act or (ii) persons who subscribe, as principal, for shares at a minimum aggregate subscription price of R1 000 000, as envisaged in section 96(1)(b) of the Companies Act (all such persons in (i) and (ii) being referred to as “relevant persons”). Any investment activity to which this announcement relates will only be available to, and will only be engaged with, relevant persons. Any person who is not a relevant person should not act on this announcement or any of its contents.
The information contained in this announcement constitutes factual information as contemplated in section 1(3)(a) of the South African Financial Advisory and Intermediary Services Act, No. 37 of 2002, as amended, and should not be construed as an express or implied recommendation, guide or proposal that the Offer, or the present or future business or investments of the Boxer Group or Pick n Pay, is appropriate to the particular investment objectives, financial situations or needs of any prospective investor, and nothing in this announcement should be construed as constituting the canvassing for, or marketing or advertising of, financial services in South Africa.
The Boxer shares mentioned herein have not been, and will not be, registered under the U.S. Securities Act.
The Boxer shares may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. There will be no public offer of securities in the United States, Canada, Australia and Japan.
The issue or sale of Boxer shares in the Offer are subject to specific legal or regulatory restrictions in certain jurisdictions. The Boxer Group assumes no responsibility in the event there is a violation by any person of such restrictions. In the United Kingdom, this communication is being distributed to and is only directed at persons who are “qualified investors” within the meaning of Article 2(e) of Regulation EU 2017/1129 as it forms part of retained EU law by virtue of the European Union (Withdrawal) Act 2018 (the “UK Prospectus Regulation”) who are also; (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order; and (iii) other persons to whom it may be lawfully communicated (all such persons in (i), (ii) and (iii) above, together being referred to as “relevant persons”). In the United Kingdom, any invitation, offer or agreement to subscribe for, purchase or otherwise acquire securities will be engaged in only with relevant persons. Any person in the United Kingdom who is not a relevant person should not act or rely on this communication or any of its contents.
In any member state of the European Economic Area, this communication is only addressed to and is only directed at qualified investors in such member state within the meaning of the Prospectus Regulation EU 2017/1129 (the “Prospectus Regulation”), and no person that is not a qualified investor may act or rely on this communication or any of its contents.
