Woolworths To Acquire Supplier in2food From Old Mutual Private Equity

Woolworths has announced a landmark deal to acquire one of its longest-standing and largest suppliers, in2food, from a consortium of sellers including the founders and Old Mutual Private Equity, in a transaction valued on the back of the supplier’s massive revenue base.

The retail giant confirmed on Monday that it had entered into an agreement to purchase 100% of the issued shares of in2food Holdings, a move that solidifies a partnership that has lasted over three decades.

A strategic swallow

in2food, a powerhouse in the South African convenience food sector, generates revenue in excess of R5 billion per annum. The supplier operates eight world-class manufacturing facilities, producing over 3.2 million packs weekly across freshly prepared meals, fresh produce, long-life goods, and bakery items.

While Woolworths remains in2food’s largest customer, the supplier also services a portfolio of other local and international clients in the food service and wholesale channels—exposure that Woolworths views as a key growth opportunity.

Rationale: Resilience and retention

The acquisition is being framed as a strategic imperative to lock down supply chain resilience and secure Woolworths’ premium positioning in the market. According to the deal rationale, bringing in2food in-house will drive greater agility, improve speed-to-market, and enhance innovation and new product development.

Crucially, Woolworths has moved to reassure the market that the deal is not about consolidation for the sake of cutting costs, but rather about securing expertise. The senior leadership team of in2food will remain at the helm, running the business as a standalone operating unit within the Woolworths group. This is intended to preserve the “entrepreneurial culture” that has defined the supplier’s success over its 30-year relationship with the retailer.

The deal terms

The purchase consideration will be settled in cash, funded through a combination of Woolworths’ existing cash reserves and available financing facilities. The transaction is expected to be earnings-accretive for Woolworths, with further financial benefits anticipated as operational efficiencies are realized over time.

The deal remains subject to customary conditions, including approval from competition authorities. However, because the transaction falls below the threshold for categorization according to JSE Listings Requirements, Woolworths has made this announcement on a voluntary basis.

With this move, Woolworths effectively brings one of its most critical strategic partners fully into the fold, ensuring that the hands preparing its premium meals are permanently part of the family.

in2food has an experienced senior leadership team with deep, multi-disciplinary expertise across the food sector. The management team will continue to lead in2food as a standalone operating business within Woolworths ensuring continuity of operations while preserving the entrepreneurial culture that has underpinned its success.

in2food is a South African based, market-leading supplier of high-quality convenience foods and one of Woolworths Foods’ most significant suppliers. in2food generates revenue in excess of R5 billion per annum through its diversified range of premium private label products across freshly prepared convenience food, fresh produce, and long-life categories as well as several ambient and bakery products. Woolworths Food is in2food’s largest customer with the balance of its customers comprising other local and international companies across the food service and wholesale channels.

Bagattini emphasised that the acquisition does not signal a change in Woolworths’ broader food sourcing model.

“Our unique relationship with our suppliers is what differentiates us, and is fundamental to delivering our premium food offering. This transaction further enhances the relationship we have with one of our most innovative suppliers, and will extend mutual benefits to our entire value chain and end-customers.”