| Tue 29 Mar 2011, 16:49 | | AIP - Adcock Ingram Holdings Limited - Acquisition of Nutrilida |
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AIP
AIP
AIP - Adcock Ingram Holdings Limited - Acquisition of Nutrilida
Adcock Ingram Holdings Limited
(Registration number 2007/016236/06)
(Incorporated in the Republic of South Africa)
Share code: AIP
ISIN: ZAE000123436
("Adcock Ingram" or "the Company")
ACQUISITION OF NUTRILIDA
1. Introduction
Adcock Ingram today announced the acquisition of the business of Nutrilida
Healthcare, ("NutriLida") (the "Transaction"), a vitamin, mineral and
supplements ("VMS") business based in Johannesburg, South Africa. The
acquisition of Nutrilida will further strengthen Adcock Ingram`s position as
the leader in the VMS market and increase its market share in the broader
Fast Moving Consumer Goods ("FMCG") market.
2. Nature of business of NutriLida
NutriLida was established in 2001 and has become a market leader in several
niche categories within the VMS industry. In 2010 NutriLida acquired the
well-known Natrodale brand thereby expanding its overall product offering
and improving the export potential of its existing product range.
NutriLida`s products include:
ProbiFlora for general digestive health
ViralGuard for immunity
ArthroGuard for joint health
GynaGuard for intimate feminine care
Bestum for everyday health and wellbeing
NutriLida achieved turnover of R212 million for the financial year ended 31
December 2010.
3. Rationale
NutriLida has strong brands in several niche market segments. It is Adcock
Ingram`s intention to continue to grow these brands and leverage its brand
building expertise to become a significant player in the South African VMS
market.
Adcock Ingram has grown its presence in the VMS category in recent years and
has a strong presence in the tonics market with household name brands such
as Bioplus, Vita-thion and Liviton.
The Transaction will strengthen Adcock Ingram`s foothold in this fast
growing market and further enable the group`s strategy to gain market share
in the FMCG category.
4. Categorisation of Transaction
In terms of the JSE Listings Requirements, the Transaction is categorised
below the threshold of a category 2 transaction. Adcock Ingram has,
however, elected voluntarily to provide to its shareholders certain details
of the Transaction.
5. Details of the Transaction
The sellers of the business of Nutrilida Healthcare are Nutrilida (Pty) Ltd,
Midsummer Assets & Leasing (Pty) Ltd and Zeiss Road Manufacturing (Pty) Ltd
("the sellers").
The effective date of the Transaction will be the last day of the month in
which the last of the conditions precedent contemplated in paragraph 6 below
is fulfilled, which is anticipated to be no later than 31 July 2011.
In terms of the purchase agreement entered into between the sellers and
Adcock Ingram the purchase price is confidential.
6. Conditions precedent
The Transaction is subject to the fulfilment or waiver, where applicable, of
a number of conditions precedent including the unconditional approval by the
South African competition authorities.
7. Pro forma financial effects
The unaudited pro forma financial effects of the Transaction set out below
have been prepared to assist Adcock Ingram shareholders in assessing the
impact of the Transaction on the Company`s historical earnings per share
("EPS"), headline earnings per share ("HEPS")and net asset value ("NAV") per
share. The pro forma financial effects are the responsibility of the
directors of Adcock Ingram and are provided for illustrative purposes only.
The pro forma financial effects have been prepared on the basis that the
Transaction had been fully implemented on 1 October 2009 for Income
Statement purposes and as at 30 September 2010 for purposes of the Statement
of Financial Position. It does not purport to be indicative of what the
consolidated financial results would have been had the Transaction been
implemented on a different date. The material assumptions are set out in the
notes following the table.
Due to their nature, the pro forma financial effects may not fairly present
the financial position, changes of equity, results of operations or cash
flows of Adcock Ingram after the Transaction.
Before the After the Percentage
Transaction(1) Transaction(2) change (%)
,(3)
EPS (cents) 363.5 381.3 4.9%
HEPS (cents) 363.4 381.1 4.9%
NAV per share (cents) 1,678.5 1,678.5 0%
Weighted average number of 173,712,465 173,712,465 0%
shares in issue*
* excludes treasury shares
Notes:
1. Extracted from Adcock Ingram`s published audited annual results for the
financial year ended 30 September 2010.
2. Based on the estimated purchase price of the Transaction and the
sellers audited balance sheets as at 31 December 2010, as if both companies`
year ends were coterminous.
3. The effects on NAV per share are based on the following principal
assumptions:
- the Transaction was effective on 30 September 2010;and
- inclusion of once-off costs of R1 million.
4. No charge for amortisation of intangible assets has been included in
the pro forma financial effects. The Purchase Price Allocation exercise, as
required by IFRS 3: Business Combinations has not yet been performed and
therefore any intangible assets acquired, that are determined to have finite
useful lives will need to be amortised. Any amortisation charge that may
arise from these intangible assets will have the effect of reducing the pro
forma EPS and HEPS, as calculated.
5. The pro forma financial effects have been prepared using the same
accounting policies as those applied in the most recently published annual
financial statements of Adcock Ingram.
Midrand
29 March 2011
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 29/03/2011 16:49:01 Produced by the JSE SENS Department.
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