Boxer Superstores, Pick n Pay’s discount grocery store chain, will list on the JSE on November 28, with a secondary listing on A2X, at a price of between R42 to R54 per share, according to the pre-listing statement released yesterday.
As part of the widely anticipated Initial Public Offering (IPO), Boxer’s parent company, Pick n Pay Group, which is in the midst of a restructuring after stores in its core brand started making losses, aims to raise between R8 billion and R8.5bn through an offer of up to 202.4 million Boxer share, or around 40% of its total issued share capital.
These values imply a total market capitalisation for Boxer of between R21.1bn and R24.7bn. Pick n Pay plans to retain a majority stake in Boxer of about 60% to 65%.
The IPO of what Pick n Pay claims is the fastest-growing grocery chain in the country is the second and final step of the two-step recapitalisation plan by the group.
Boxer plans to add 65 new stores by the end of this financial year, with the medium- to long-term aim of doubling 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 its balance sheet. A successful R4bn rights offer three months ago was 106% oversubscribed and saw the group returning to a positive equity position of R2.8bn.
Step two would see proceeds from the Boxer IPO used by Pick n Pay to settle outstanding group debt and reinvest in the core Pick n Pay supermarket business.
Boxer Superstores is the pre-eminent discount grocery retailer in South Africa, with an annual turnover of R37.4bn, a trading profit of R2.1bn and a store estate of 489 as of the end of August 2024.
Pick n Pay said in a statement that the 47-year-old Boxer had a track record of consistent growth since its acquisition in 2002 under the leadership of then-CEO Sean Summers, when it had just 35 stores and annual sales of R800m.
Its ‘soft discounter’ proposition in the South African market had 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 turnover at a compound annual growth rate of 18.6% between 2022 and 2024, with like-for-like growth of 7.7%, as a result of its customer value proposition and accelerated store rollout programme.
Boxer CEO Marek Masojada explained their unique positioning in the market.
“Our turnover growth has been achieved in the most competitive of trading environments, reflecting the coming of age of the Boxer brand,” Masojada said.
“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,” he added.
Pick n Pay CEO Sean Summers said the initial capital raised from the listing would mean Pick n Pay would be debt-free, with a strong balance sheet and a significantly reduced interest bill, putting it in a position to accelerate its turnaround.
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