Old Mutual Alternative Investments invests to strengthen South Africa's food security

In a landmark transaction for South Africa’s food processing sector, Hybrid Capital, a division of Old Mutual Alternative Investments (OM Alternatives) and Rand Merchant Bank (RMB), have provided a bespoke funding solution to Thebe Investment Corporation (Thebe), a leading, black-owned investment management company. The funding will facilitate Thebe’s acquisition of a further 40% shareholding in Pride Milling, one of the largest maize millers in South Africa.

This transaction will see Thebe, together with the existing shareholders, become the majority owner of Pride Milling.

Established in 2001, Pride Milling has developed from a small business into a sophisticated milling operation with a trusted brand reputation. The company’s products are not only a staple food for South Africans, but are also exported to various regions across the African continent. Pride Milling is well-positioned to continue its growth story.

Hashim Pohplonker, a Senior Investment Associate for Hybrid Capital at OM Alternatives, emphasised the critical role of this funding and its macro impact, “Our investment highlights the importance of private sector contributions to industries underpinning food security in South Africa. A material portion of our population is unsustainably food insecure. Through Thebe’s acquisition of Pride Milling, supported by Hybrid Capital’s funding, there will be enhancements to the food value chain, employment opportunities and, most importantly, to the availability of affordable, quality and nutritious staple foods for a broad segment of our population.”

According to Stats SA, in 2021, approximately 21% of South African households struggled with inadequate access to food, notably affecting urban centres like Johannesburg and Cape Town.

Pohplonker added that Hybrid Capital’s participation in this transaction reflects a commitment to developing partnerships capable of driving South Africa’s economic growth, “This transaction is a testament to the potential of long-term, collaborative partnerships in driving sustainable economic development and empowerment. We are extremely proud to have played a meaningful role in this transaction and look forward to supporting Thebe and Pride Milling, both of whom share our strong commitment for the development of this sector.”

Rapulane Mabelane, Thebe’s Chief Investment Officer, highlighted the transaction’s significance: “Acquiring a majority stake in Pride Milling not only strengthens our position in the food and agriculture sector but also aligns with our core purpose of driving transformation, growing local industries and building the communities we serve. By partnering with OM Alternatives Hybrid Capital, RMB and the exceptional Pride Milling team, we are well-positioned to make a substantial and positive impact on food security. Our increased shareholding in Pride Milling will also provide employees of Pride Milling with a direct shareholding in the company and increase supply opportunities for small and women-owned farmers”.

Jorrie Jordaan, CEO and co-founder of Pride Milling, expressed optimism about the future: “This partnership marks a continuation of our long-standing relationship with Thebe. With the additional resources and strategic guidance, we are poised to expand our operations and continue our journey of providing equitable access to staple foods and playing a role in economic development.”

 “RMB is proud to be part of this significant transaction. Our involvement underscores RMB's commitment to backing high-impact transactions that drive growth and innovation within key sectors of the South African economy. By facilitating access to capital, we are enabling Pride Milling to continue its expansion and positively impact the broader food value chain", says Farisani Ramabulana, Leveraged Finance transactor from RMB.

Pohplonker also stated that despite prevailing economic conditions, this investment demonstrated continued confidence in South Africa's economy and further bolstered the Hybrid Capital investment portfolio.

OM Alternatives, a leader in the alternative investment landscape, has consistently driven innovative and impactful funding solutions. With this latest investment, OM Alternatives reinforces both its commitment to key pillars of the economy and to making an enduring, positive impact.