Wrap Text
Acquisition Of 100% Of The Shares And Claims In Sportron International (Pty) Ltd
GO LIFE INTERNATIONAL LIMITED
(Incorporated in the Republic of Mauritius)
(Registration number: 098177 C1/GBL)
Primary Listing SEM share code: GOLI.N0000
Secondary Listing JSE share code: GLI ISIN: MU0330N00004
(“the Company” or “Go Life”)
Acquisition Of 100% Of The Shares And Claims In Sportron International (Pty) Ltd (“Sportron”),
Heritage Resources Limited (“Heritage Resources”), Ascendis Health Direct Proprietary Limited
(“Ahd”), K2012021382 (South Africa) Proprietary Limited (“K2012021382”), And The Biobalance,
Foodstate, Osteoflex And Homeoforce Brands (“Wellness Brands”)
Shareholders are advised that Go Life International Limited and Go Life Healthcare Limited
(“GLHC”), a wholly owned subsidiary of Go Life International, (jointly known as “Go Life”)
has entered into two agreements with Ascendis Health Limited (“Ascendis”) to acquire the
Wellness Brands and 100% of the shares and claims in Sportron, Heritage Resources, AHD
and K2012021382. Ascendis is not a related party to Go Life.
1. Description of Sportron
Sportron boasts a range of products that have been carefully formulated to help
maintain overall wellness and assist in certain conditions. The nutrient formulations
are among the best in its class and comply with international legal requirements.
2. Description of Heritage Resources
Heritage is principally involved in holding registered trademarks and earning royalty
income on assets.
3. Description of AHD
AHD (known as Ascendis Health Direct) is a leading network marketing company
specialising in the health industry. The company competes in the South African and
African markets (Nigeria) through a dedicated network of motivated sales
representatives.
4. Description of the Wellness Brands
Foodstate, Biobalance, Osteoflex and Homeoforce are well known household
health and care brands in South Africa.
5. Consideration (“Purchase Price”)
Subject to the completion of the Conditions Precedent, the total Purchase
Consideration payable in respect of the Acquisitions is R50,000,000.00 in cash, as
follows:
a) an amount of R20,000,000.00 (“first payment”), to be paid on the Effective Date;
b) Go Life Healthcare paying an amount of R20,000,000.00 (“second payment”) on
or before 31 December 2018, provided that this payment shall accrue interest of
10% per annum from the effective date until the second payment payment is made;
and
c) an amount of R10,000,000.00 (“anniversary payment”), to be paid by Go Life
Healthcare on the first anniversary of the Effective Date.
In addition to the above, as at 30 June 2018, AHD owed an amount of R7,675,575.00
to Ascendis Supply Chain, which is payable in three instalments, commencing 31
December 2018 and the last being by 31 December 2019.
6. Conditions Precedent and Effective Date
The effective date of acquisition is 10 September 2018 (“Effective date”) or such later
date as Go Life and Ascendis may agree in writing. All Conditions Precedent have
been met and the due diligence has been completed. The Transaction however
remains subject to the fulfilment of certain Conditions Subsequent as detailed in
paragraph 9 below.
7. Conditions Subsequent
The agreements giving effect to the Acquisition are subject to the fulfilment or waiver
of the following conditions subsequent but no later than 30 September 2018:
a) Change in Shareholding in Heritage Resources either conditionally, or, if
unconditionally, with conditions to the satisfaction of Go Life and Ascendis, each
acting responsibly;
b) AHD and Ascendis Supply Chain enter into a supply chain agreement on terms
to the satisfaction of Ascendis, acting reasonably and the Supply Chain
Agreement becomes unconditional in accordance with its terms;
c) AHD provides Ascendis with a general notarial bond over all of its stock of finished
products, raw materials and packaging in respect of finished products of Sportron
and Swissgarde products as security for the secured obligation of the second
payment as contemplated here above.
d) Go Life Healthcare provides Ascendis with a general notarial bond over all of its
stock of finished products of Biobalance, Osteoflex, Homeoforce and Foodstate
products as security for the secured obligation of the anniversary payment.
e) Swissgarde and Ascendis enter into a cession of book debts, pursuant to which,
inter alia, Swissgarde cedes in securitatem debiti all claims of whatsoever nature
and howsoever arising as at the effective date and may from time to time in the
future have against Herbal Option (Pty) Ltd to a maximum value of R13,000,000.00
to Ascendis as security for the due, proper and timeous payment and performance
by Go Life Healthcare in full of the Secured Obligation of the anniversary payment.
8. Rationale for the Acquisition
The Acquisition will unequivocally place Go Life at the forefront of the healthcare
industry in its focus areas. Go Life has taken the initiative to differentiate itself from
other healthcare providers in South Africa by being accessible, innovative and
affordable for each segment of the South African market.
The Sportron range of products is a perfect fit in the cutting edge technological
sphere in which Go Life operates, being nutraceuticals. Sportron boasts a range of
nutrient formulations which are among the best in the world. Go Life will seamlessly
incorporate the Sportron range into its existing range of well known, tried and tested
products to create a collection of products for all members of society. This will place
Go Life in the midst of the lower and higher end of the market with product ranges
for South Africans from all walks of life.
AHD is expected to be the most promising prospect of the Acquisitions as it boasts
an established and ever-growing network of direct sales representatives. It is
anticipated that this network will dramatically escalate the sales of Go Life’ existing
product range. The aim is to grow this existing network to make a difference in value,
in contribution and in perspective of each South African sales representative within
the network.
Further to the South African network, there is an additional network of direct sale
representatives operating in Nigeria. This opens Go Life to a market of 196 million
people who are in dire need of accessible and affordable healthcare and
supplementary health products.
Go Life anticipates to incorporate the trademarks and patents vested in Heritage
Resources into the existing collection of Go Life trademarks and patents and will
better leverage the potential of the product ranges across the Go Life group of
companies.
Consumer Brands will give Go Life the opportunity to pioneer the health sector by
incorporating well known household South African brands into the existing ranges.
This will familiarize the market with brands within the Go Life range that may not be
as prominent as the brands within Consumer Brands but work as well. Go Life will in
essence become a trusted brand amongst South Africans with the incorporation of
Consumer Brands.
Supply Chain will focus all the brands and ranges in Go Life in one stream as it is an
established manufacturer of nutritional supplement, herbal and homeopathic
medicines. There will be no need for Go Life to outsource manufacturing of its
product ranges and it provide Go Life with a solid foundation to drive the market
with its new and focussed vision.
Chempure brings about a new era for Go Life where the group can procure,
analyse, research and develop new products. This also provides the prospect for Go
Life to enhance the existing products across all the ranges.
9. Financial Information
The year end for the entities acquired as part of the Acquisition is 30 June each year
and the financial statements have historically been prepared in accordance with
International Financial Reporting Standards for Small-Medium Size Entities. The
annual financial statements are to be provided to Go Life on or before 31 December
2018. Certain of the products operate as divisions.
Accordingly, the information has been extracted from unaudited management
accounts, which reflect the following:
AHD Acquisition - net sales of R90.3 million, with a gross contribution of R13.2 million
and Loss Before Interest and Taxation of R3.0 million (partly due to retrenchment costs
during the year ended 30 June 2018; and
Chempure - net sales of R20.8 million, with a gross contribution of R4.8 million for
Foodstate, Bio Balance, Osteo Flex and Homeoforce, being the trade names
acquired in relation to Chempure.
The net profit after tax and net asset value of the entities being acquired, as
extracted from the draft Annual Financial Statements for the year ended 30 June
2017, are set out below:
Net profit after tax for
the year Net asset value
Rand Rand
Sportron (1) 190 109 479 9211
Heritage Resources (2) (721 864) 2 327 3782
AHD3 (4 853 527) 31 363 908
Swissgarde Proprietary Limited4 1 011 259 35 188 330
K2012021382 (not consolidated) (10 854) 27 225 336
TOTAL (4 384 877) 96 584 873
1. Applicable exchange rate, as at the date of this announcement, is N$ 1 to
ZAR 1.
2. Applicable exchange rate, as at the date of this announcement, is GBP 1 to
ZAR 18,96.
3. Includes management fees of R3,919,034 from Ascendis, which will be non-
recurring following the conclusion of the transaction.
4. Wholly-owned subsidiary of K2012021382, which company’s financial
statements are not consolidated.
No separate financial statements are available for the Wellness Brands.
10. Classification of the Acquisitions
In accordance with the Listings Requirements of Stock Exchange Mauritius (“SEM”),
the Acquisitions are not classified as a Substantial Transaction and accordingly a
circular and shareholder approval is not required.
Go Life International has its primary listing on the Stock Exchange Mauritius and a
secondary listing on the AltX of the JSE
MAURITIUS
03 September 2018
FinAegis Ltd
(230) 214-2663
JSE Sponsor: Arbor Capital Sponsors Proprietary Limited
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