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Acqusition of controlling interests in Lieben and GLS
Super Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1943/016107/06)
Share code: SPG
ISIN: ZAE000161832
(“Super Group”)
ACQUISITION OF CONTROLLING INTERESTS IN LIEBEN and GLS
1. Introduction and overview of the Transaction
Super Group has concluded a subscription agreement with the shareholders
of LiebenLogistics Proprietary Limited (“Lieben”) and a share purchase
agreement with the shareholders of GLS Supply Chain Equipment
Proprietary Limited (“GLS”) in terms of which Super Group Holdings
Proprietary Limited (“the Purchaser”), a subsidiary of Super Group, will
acquire a controlling interest in each of Lieben and GLS by way of a
subscription for shares in Lieben comprising an approximate 65%
shareholding holding in Lieben (“the Lieben Subscription”) and the
purchase of shares comprising 51% of the issued shares in GLS from the
current shareholders of GLS (“the GLS Purchase”) (as more fully
described below).
The shareholders of Lieben, who are party to the above subscription
agreement, are Dalistep Proprietary Limited, Cherry Moss Trade and
Invest 32 CC, Casadobe Props 99 CC and Harbour Lights 301 CC.
The sellers in regard to the share purchase agreement are Leonhardt von
Solms van Niekerk, Motive Mover Trading Proprietary Limited, Christel
Thiart and the trustees of the Liebenberg Familie Trust, acting in their
capacity as such.
The Lieben Subscription and the GLS Purchase are linked transactions in
that both of them must become unconditional and be implemented for
either of them to be effective.
2. Nature of business
Lieben is a diversified logistics and supply chain management company
focused on providing transportation services to clients active in an
assortment of industries including retail, meat, fresh produce and
other cold-chain goods. In addition, Lieben transports dry goods for
its extensive client base. Geographically the company operates from
depots and satellite offices in Cape Town, Port Elizabeth, East London,
Durban and Johannesburg.
The Lieben operating fleet includes refrigerated trucks of between
eight and 18 ton, as well as refrigerated pallet vehicles with the
capacity to carry loads of between 16 and 30 pallets, in addition to
other vehicles. The fleet operates locally in specific geographical
nodes, as well as via an extensive long-haul distribution grid across
South Africa as a whole.
Lieben maintains contractual service delivery agreements and executes
on-demand, point to point specialised transportation services for its
wide-ranging client base.
Over a period of more than 23 years Lieben clients have benefited from
the company’s strategy of continuous investment in its fleet and
crucial support services such as information technology, as well as its
skills development and human talent enhancement activities.
GLS is a leading supplier of returnable packaging solutions and
outsourced equipment services to optimally manage, store and progress
products through different supply chain operations. Its diverse client
base relies on GLS to advise them on how to effectively create and
manage efficient supply chains through the judicious utilisation and
management of purposeful equipment and methodologies.
The cost-saving benefits of the continued investment by GLS in the
improvement of systems and technology is passed on to clients through
efficiency enhancements in optimising equipment-use in end-to-end
supply chain practises.
Some of the key GLS success factors include the company’s ability to
offer clients traceable, environmentally friendly equipment solutions
that save cost. Through its extensive network of global leaders in
supply chain equipment, the company stays in front of the latest trends
and best-practise improvements.
3. Consideration
The subscription price payable in regard to the Lieben Subscription
is an amount of R498 775 800, which amounts to a forward PAT price
earnings multiple of 8.1 times.
The purchase price payable in regard to the GLS Purchase is
R96 285 235 which amounts to a forward PAT price earnings multiple of
8.1 times if prescribed PAT warranties are achieved by GLS. In the
event that an incubated business materializes by December 2019 and
this business achieves warranted two year PAT targets, the purchase
price payable could increase by R82 875 000, with a maximum potential
payment of R204 000 000, based on a 6.5 times price earnings
multiple.
The forecasts have been prepared by the management of Lieben and GLS
and are for illustrative purposes only.
The aforementioned subscription and purchase prices plus costs will
be settled by Super Group from cash resources.
4. Value of the net assets acquired and profits attributable to those
assets
4.1. The net asset value of the Lieben Subscription will be a minimum of
R98 752 531.
4.2. The forecasted profit after taxation associated with the above assets
is R94,7million.
4.3. The net asset value of the GLS Purchase will be a minimum of R21 024
452.
4.4. The forecasted profit after taxation associated with the above assets
is R23,3 million.
5. Rationale for the Transaction
Super Group’s strategy over the past seven years has been to make
selective acquisitions in its core businesses namely Supply Chain,
Fleet Management and Dealerships in South Africa and internationally.
The acquisition of the Business is in line with this strategy and
represents an opportunity for the Group to significantly enhance its
sphere and operations across the refrigerated and retail sectors in
South Africa. The business also reinforces the Super Group position in
both retail and other cold-chain distribution as well as the management
of returnable packing solutions and systems.
6. Conditions precedent
Both transactions remain subject to, amongst others,the following
conditions precedent:
1. Approval of the transactions by the Competition Commission and the
Competition Tribunal;
2. Other than the agreements referred to in 1 above, conclusion by the
relevant parties of the related documentation necessary to give
effect to the transactions; and
3. The Purchaser notifying Lieben and GLS that it is satisfied with the
outcome of the due diligence investigations conducted by it in regard
to Lieben and GLS.
7. Effective date
Subject to the conditions precedent being met the effective date of the
Transactions is expected to be 1 July 2019.
8. JSE categorisation
The Transaction is a category 2 transaction in terms of paragraph
9.5(a) of the JSE Listings Requirements.
Sandton
21 June 2019
Sponsor: Investec Bank Limited
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