Brian Joffe’s Long4Life to buy SA drinks maker

If the country does well, Sorbet or lifestyle brands, etc, are going to be growing reasonably fast, points out Viv Govender of Rand Swiss.
Brian Joffe's Long4Life strategy will add to his legacy. Picture: Moneyweb

NASTASSIA ARENDSE:  Brian Joffe’s investment firm, Long4Life has agreed to buy Chill Beverages for at least R452 million in cash and shares. To help us try and analyse this transaction and talk a little more about Joffe’s strategy is Viv Govender from Rand Swiss. Viv, thank you so much for your time.

VIV GOVENDER:  Thanks for having me.

NASTASSIA ARENDSE:  This company has been on fire. It’s been making a string of acquisitions since it listed in April, and it’s also making acquisitions in an environment like this. What do you make of it?

VIV GOVENDER:  They always say you want to be aggressive when people are scared and that’s the Warren Buffett [strategy]. This is a perfect example of that. If you have faith in South Africa, if you have faith in the African region, these are the kind of opportunities you want to be looking for, because going forward this is one of the last regions in the world that really hasn’t had the exposure or had massive over development… .

If you basically right now get into this market you are able to buy things reasonable cheaply and take a longer-term view, and you can possibly get real bargains like 10, 20 years down the line. …

So this is something that could work out very well. However, if you do see the continuing economic despair in the region, and in South Africa especially, it could be something about which that you would be thinking: Is this at the bottom, perhaps not just yet.

But I do think, going forward, right now is probably where 10, 20 years from now people are going to be looking back and saying, this is where the price was the lowest and we should’ve been buying.

NASTASSIA ARENDSE:  I suppose it paints a picture that Brian Joffe has a lot on the line. He’s been known as somebody who is able to produce some really great positive returns with Bidvest as well. Do you feel like he is under pressure to deliver with this one?

VIV GOVENDER:  I think to a certain extent. But not what a young businessperson who is starting out would be feeling. I don’t think Brian Joffe’s going to go broke, or that he is worried about cash flow. It’s more a voluntary project going forward. … …

With Long4Life they are investing in lifestyle brands, things that he finds to be fine, assets, the banking sector and health products and that kind of stuff.

It’s quite a bit of money, but it’s something that seems somebody who’ll always have a legacy just wants to do, an extra arm. But there is no reason for him to do it for the money, I would think. …

NASTASSIA ARENDSE:  What do you think of this wellness and leisure factor that he’s operating in? The wellness space is something we know Discovery for, and they seem to be doing well. What’s your take on that sector?

VIV GOVENDER:  I do think it’s all playing to the idea that it’s a belief that has been tarnished in the last couple of years. Remember the African Renaissance and the idea that Africa was going to be the next Asia, etc? I think the fundamental demographic still holds to that.

If you look at 2035, which is about 15, 17 years from now, you’ll have more workers in Africa than in the rest of the world combined. This is going to be the worst off in the world. Asia is going to ageing. If you look at America of course it’ll be having much slower growth rates.

If people have a view that Africa is going to be successful in future, for which the demographics do seem to indicate there is a strong possibility, getting into these kind of sectors especially, more consumer sectors, on this kind of growth… If the country is doing very well, goods like these, Sorbet or lifestyle brands, etc, in terms of the economy are going to be growing reasonably fast. We have a consumer population rising very fast. These are brands that really are going to take off to become newest sensations, and they are the things that are going to give you the gearing in the economy. …

NASTASSIA ARENDSE:  We’ll have to leave it there. Viv, thank you so much for your time.

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