RMBfinancialadvisertoTheFoschiniGroupinacquisitionofhome-furnishingsbusiness

 

Client challenge

Listed on the Johannesburg Stock Exchange (JSE) Limited since 1941, The Foschini Group (TFG) is regarded as one of the foremost independent chain-store groups in South Africa. The group has a successful track record when it comes to delivering desirable returns for investors and aims to continue to achieve this through a strategic focus on customer experience. TFG entered into a sale and purchase agreement to acquire the entire issued share capital of Tapestry for R2.35 billion.

Established in 2005, Tapestry is a prominent direct-to-consumer, vertically integrated designer, manufacturer and omnichannel cash retailer of home furnishings serving consumers’ living and sleeping needs, targeting the middle to upper LSM markets. The Tapestry brands include popular made-to-order furniture retailer, Coricraft; South Africa’s renowned branded bedding retailer Dial-a-bed; home textile retailer, Volpes; and value bedding retailer, The Bed Store. The Tapestry brands are well positioned for growth in the medium to long term.

TFG has acquired the Sale Shares from Westbrooke Investments Proprietary Limited, funds managed by Actis, as well as the current and previous management of Tapestry.

RMB's solution

RMB played a key role as financial adviser to TFG in relation to its acquisition of the entire share capital of Tapestry for a purchase consideration of R2.35 billion on a debt free and cash free basis.

The acquisition of Tapestry with its easily scalable local manufacturing and distribution capabilities is aligned to TFG’s stated strategy of vertical integration in key product categories, and the continued development of its quick response local manufacturing capability.

Client enablement

In line with TFG’s strategy to expand its homeware and home furnishing footprint, this proudly South African acquisition will augment TFG’s current offering of @home services in the middle to upper segments with premium home textiles, decor and furniture.

Following the acquisition, TFG Home Division will have nine homeware consumer brands (@home, @homelivingspace, Jet Home, Coricraft, Volpes, Dial-a-Bed, the bed store, Granny Goose and Biggie Best), and four vertically integrated factories (mattresses, upholstered furniture, household textiles, duvets and pillows). TFG will also have an expanded distribution network and its own last-mile furniture delivery and assembly service.

Client	The Foschini Group
Size of the deal	R2.35bn
Sector	Retail
Capabilities	Corporate Finance Advisory
RMB's role	Financial adviser
Country	SA