In October, Clover Industries Limited (Clover) and Frankie’s Olde Soft Drinks (Frankie’s) concluded agreements to establish a new business, Clover Frankie’s Proprietary Limited.
Clover Frankie’s will manufacture, sell, market and distribute a range of carbonated soft drinks (CSD), hot chocolate powder and lollies using the Clover (under license) and Frankie’s trademarks.
Clover will hold 51 per cent of the new venture and Frankie’s the balance. Clover has the option to acquire the remaining issued share capital in future at a purchase price to be calculated using an already agreed formula.
The transaction is in line with Clover’s stated strategy to expand its portfolio of value added and branded consumer products. It also provides the producer with a niche platform to enter the CSD market as well as possible extension to other product categories.
Johann Vorster, Clover chief executive comments: ‘Frankie’s is a much loved brand and a unique concept. Consumers identify with its “good old-fashioned” values, unique taste and distinctive brand.’ He adds that the acquisition provides Clover with an important platform from which to launch into CSDs and other value added branded ranges.
Mike Schmidt, co-founder of Frankie’sadds: ‘This deal represents a huge opportunity for our brand. On the one hand, it was an emotionally tough decision to part with the brand that Paula and I have spent the past nine years growing. On the other, we knew that this was absolutely the right thing and, more importantly the right time, to do this deal.’
Frankie’s outsources its entire sales, merchandising and production function. With 80 per cent of historical sales happening in Gauteng, KwaZulu-Natal and the Western Cape, the company is confident the new business will benefit tremendously from the wider national footprint, additional listings and sales and merchandising expertise in Clover’s distribution network.
‘We are confident that with access to capital and the financial backing of the mother brand Clover, Frankie’s will be able to unlock the full potential of its positioning as a distinctive retro brand with unique flavours,’ concludes Schmidt.
