The black don of South African advertising has clinched one of the biggest empowerment transactions, writes Ferial Haffajee
It’s been a buoyant year for advertising guru Peter Vundla, who has sealed a R1,8-billion deal for a top food company in the third-largest transfer of wealth from white to black hands in South Africa’s history.
His company Pamodzi’s purchase of Foodcorp, better known for brands such as Simba Chips, A1 mealie meal and Mageu Number One, is notable even at a time of rapid acquisition and sale both on and off the stock exchange.
In January Vundla celebrated his 50th birthday by spearheading the merger of his ad agency with an international company to create Herdbuoys McCann-Erickson. That places Vundla right up there with the likes of Nthato Motlana, Cyril Ramaphosa and Wiseman Nkuhlu.
Foodcorp is arguably an even bigger deal than the notable transactions which saw Anglo American sell Johnnic and JCI, which were bought by complicated consortiums. “It’s the biggest single-entity empowerment transaction,” says Kobus du Plooy of Pamodzi.
Vundla’s creative deal-making has seen a massive exchange of Afrikaner capital (Sanlam was the ultimate owner of Foodcorp) to the new dons of black business (Vundla’s partners include the local owners of Nike) with a little help from the Dutch. This week, ABN-Amro, a Dutch bank, announced that it would fund almost half the purchase in return for Foodcorp shares.
It’s been quite a journey for Vundla – a member of Deputy President Thabo Mbeki’s “kitchen cabinet” – whose working roots began as a librarian at Market Research Africa.
That whetted his appetite for marketing and advertising and culminated in the 1991 formation of Herdbuoys, the country’s first black-owned advertising agency, which worked at first from a house in Soweto. He was for long the bte noire and the conscience of an industry not easily nettled.
Vundla’s cajoling began the great “when is the ad industry going to wake up?” debate – and the industry is now beginning to do so. It was as if Vundla’s accession to the hitherto lily-white and exclusive Association of Advertising Agencies last year marked his crowning moment in advertising. His restive mind and deep pockets needed other pastures.
Vundla last year started Pamodzi Holdings with Felicia Mabuza- Suttle, Solly Sithole and Ndaba Ntsele, although he retained the top seat at Herdbuoys. Pamodzi (Swahili for “we are one”) moved quickly, snapping up interests in the information technology and health sectors. Unlike many empowerment deals, the partners were well-heeled enough to fund their own start-up and other costs.
Their interest in the food industry was piqued when they bought into Sodexho Southern Africa, a subsidiary of the world’s largest food-service group. That made them a favoured bidder for the controlling stake in Foodcorp.
Pamodzi’s company bumph doesn’t peddle its blackness in the way many black corporations do. That may reflect the influence of Vundla, who for many years spoke out against tokenism in the advertising industry.
The new holding company advertises its talent – Mabuza-Suttle’s claim to fame is that President Nelson Mandela told her, “You are making a very valuable contribution to our country” – skills pool and its connections with the halls of political
power. “[The directors’] circle of influence with local and national government, as well as business leaders, is significant,” reads the Pamodzi prospectus. It also says that Ntsele and Sithole had the support of Mbeki in their bid for the Nike franchise, which they subsequently won.
Vundla is part of Mbeki’s African think-tank which the deputy president uses as a sounding board. Ironically, the Foodcorp acquisition places him in direct competition with Molope Foods, which listed recently and was tossed into the limelight whenRamaphosa became a shareholder and its chair. Molope’s earlier bid for Foodcorp was not successful.