| Wed 27 Feb 2002, 0:00 | | Excellerate - Acquisition Of Selected Assets From |
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EXCELLERATE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
JSE Share code: EXL ISIN: ZAE000026092
(Registration number 1997/009884/06)
("Excellerate")
Acquisition of Selected Assets from the Afribrand Group:
* MB Fine Foods Importers and Distributors (Proprietary) Limited in
Provisional Liquidation ("MB Fine Foods")
* GW Foods (Proprietary) Limited in Provisional Liquidation ("GW Foods")
* Afribrand Beverages (Proprietary) Limited in Provisional Liquidation
("Afribrand Beverages")
1. INTRODUCTION
Nedcor Investment Bank Limited is authorised to announce that Excellerate
has acquired:
* all the plant, machinery, furniture, fittings, intellectual property,
trademarks, brand names, logos, recipes, patents and certain selected stock
forming part of the Alpine business which traded within MB Fine Foods and GW
Foods ("the Alpine business"), with effect from 24 February 2002, through
its wholly-owned subsidiary, Ibiza Trading 2 (Proprietary) Limited (to be
renamed Alpine Importers & Distributors); and
* all the plant, machinery, furniture, fittings, intellectual property,
trademarks, brand names, logos, recipes, patents and certain selected stock
forming part of the Fruti Flow business which traded within Afribrand
Beverages ("the Fruti Flow business"), as well as the property from which
the Fruti Flow business is conducted ("the Fruti Flow property"), with
effect from 24 February 2002, through its wholly-owned subsidiary, Tecino
Trading 4 (Proprietary) Limited (to be renamed Fruti Flow),
from the Afribrand group represented by its joint provisional liquidators,
subject to certain terms and conditions more fully set out below.
2. RATIONALE
The ExcellTrade Division of Excellerate distributes branded international
and local non-food products to mass merchant retailers and the catering,
hospitality and food service industries. The acquisition of both the
profitable Alpine business and the Fruti Flow business provides a natural
extension of the ExcellTrade Division into the distribution of branded,
international and local food products to those industries. The Alpine
business and the Fruti Flow business specifically complement Excellerate's
FoodServ business, which is one of the leading suppliers of internationally
and locally branded catering equipment to the fast food, restaurant,
hospitality and industrial catering industries in southern Africa.
The Alpine business is a nationwide marketer of local and imported premium
products under the Sunkist, Debras and Goldbees house brand names, as well
as other leading international and local brands. The Alpine business
distributes its products nationally to mass merchant retailers and to
catering, hospitality and food service wholesalers, who, in turn, supply the
catering, hospitality and food service industries with such products.
The Fruti Flow business is a manufacturing operation, which produces
trademarked, patented and packaged frozen confectionery aimed at the middle
and top end of the consumer market in southern Africa. Distribution into
mass merchant retailers takes place primarily through the Alpine business,
with the Fruti Flow products comprising one of the major lines within the
Alpine business. Other sectors of the consumer market are targeted by the
Fruti Flow business directly.
Excellerate considered it strategically necessary to acquire the Fruti Flow
business in order to provide continuity of the existing distribution channel
to the mass merchant retail sector of the market. The synergy between the
Alpine business and the Fruti Flow business thus allows Excellerate to
control the distribution channel, which is one of the cornerstones of
Excellerate's distribution philosophy.
Excellerate intends to enhance the manufacturing capabilities and the
product lines of the Fruti Flow business in the near future, with a view to
exploiting the export potential of the Fruti Flow business. Excellerate has
also secured exclusive distribution rights from important major
international and local principals of the Alpine business and is continuing
to seek further rights to enhance the critical mass of the Alpine business
Excellerate has employed members of the existing senior management teams of
both businesses, as well as other key members of staff. Excellerate
believes that the Alpine business and the Fruti Flow business will benefit
the group, as these businesses were profitable at the time of the
provisional liquidation of the Afribrand Group.
3. PURCHASE CONSIDERATION
The maximum purchase consideration payable for the Alpine business and the
Fruti Flow business is the sum of R13,5 million plus value added tax (where
applicable), which will be paid in cash upon the agreements becoming
unconditional and which will be funded out of existing resources. The
purchase consideration is subject to reduction after asset verification and
stock costing and counting.
4. FINANCIAL EFFECTS
While it is anticipated that over the medium to long term these acquisitions
will enhance Excellerate's earnings, the effect on earnings and headline
earnings per share for the year ended 30 June 2001 cannot be determined as
relevant historical earnings relating to the assets and more specifically,
the product lines being acquired are not available due to circumstances
surrounding the companies from which these businesses are being acquired.
The acquisitions do not have a material effect on Excellerate's net asset
and net tangible asset value per share as at 30 June 2001.
5. CONDITIONS
The acquisition of the Alpine business is subject to certain suspensive
conditions, namely, the written approval of the secured creditors of MB Fine
Foods and GW Foods, including a banking consortium, as well as the approval
of the Master of the High Court of South Africa ("the Master") to the
acquisition of the Alpine business and the acquisition of the Fruti Flow
business becoming unconditional.
The acquisition of the Fruti Flow business is subject to certain suspensive
conditions, namely, the written approval of the secured creditors of
Afribrand Beverages, including a banking consortium, as well as the approval
of the Master to the acquisition of the Fruti Flow business and the
acquisition of the Alpine business becoming unconditional.
If the suspensive conditions are fulfilled, both acquisition agreements
(save for the acquisition of the stock relating to the Alpine business) are
subject to the resolutive condition that the Fruti Flow property is sold to
Excellerate or its nominee on pre-determined terms and conditions which form
part of the Fruti Flow agreement.
Sandton
27 February 2002
Investment bank and sponsor
Nedcor Investment Bank
Corporate law advisers and consultants
Edward Nathan & Friedland (Pty) Ltd
Corporate Law Advisers & Consultants
Attorneys to the joint provisional liquidators
Feinsteins Attorneys
(Levy, Feinsteins & Associates Inc)
(Registration number 1995/001716/21)
