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CONAFEX HOLDINGS SOCIETE ANONYME - ACQUISITION ANNOUNCEMENT
CONAFEX HOLDINGS SOCIETE ANONYME
(Incorporated in Luxembourg
RC Luxembourg No. B 17789)
(`Conafex`)
JSE CODE: CNX ISIN: LU0167907293
ACQUISITION ANNOUNCEMENT
Introduction.
Imara Corporate Finance South Africa (Pty) Limited is authorised to announce
that Conafex has acquired 26.86% of the equity in Grassroots Group (Pty) Limited
(`GRG`) with effect from 1st October 2004.
Nature of business and rationale
Conafex is a pan-African agri-resource group listed on the Luxembourg Stock
Exchange and the JSE Securities Exchange South Africa (`JSE`) and focuses on
horticulture, niche and value added agriculture. In 2003, Conafex acquired
strategic stakes in Intertrading Limited (`Intertrading`) and Coffee Tea and
Chocolate Company (Pty) Limited (`CTC`).
- Intertrading is an agri service and marketing company listed on the JSE
that procures Southern African fresh fruit and vegetables and macadamia
nuts and markets them internationally via sea and air freight.
- CTC is based in Cape Town and packs black and herbal teas and coffee under
its well-known brands that are sold through leading retail chains in South
Africa.
GRG is a niche agri-processing business focusing on natural health and lifestyle
products with its main processing facility situated in the Western Cape. GRG was
founded by Dr. Earle Graven in 1993 following his retirement after a
distinguished career at the University of Fort Hare where he held the Chair in
Agronomy. The management of GRG includes highly qualified professionals who have
years of `hands on` experience in the fields of botany, horticulture, medicinal
agronomy and agricultural engineering.
GRG operates four enterprises namely Natural Products, Plant Improvement,
Phytomed and Cape Botanicals.
- Natural Products produces a range of quality essential oils for use as
flavours and fragrances, as well as aromatherapy, and modern and
traditional medicines.
- Plant Improvement develops and propagates elite selections of indigenous
plants.
- Phytomed supplies high quality dried botanicals for human and animal
medicines.
- Botanicals produces a unique range of dried fruits and botanicals for the
decorative market.
A high proportion of GRG`s turnover is exported, mainly to Continental Europe.
By networking with agri-processing partners through joint ventures, GRG is
enhancing the variety of African natural products which are marketed globally.
Salient terms of the acquisition.
In terms of the agreements, Conafex has purchased equity for R1.1 million and
subscribed an additional R1.66 million for new shares, in total 26.86% of the
equity. If certain profit targets are met in the financial year ending 31st
October 2004, an additional R242, 000 will become payable for the subscription
shares. Similarly, if `threshold` profits are not met the price of the
subscription shares will be reduced accordingly.
Conafex has the right to nominate two directors to GRG`s board.
Financial details of the transaction.
The effect on the net asset value of Conafex shares and the effect on Conafex`s
earnings are not significant.
Categorisation of the transaction.
In terms of the JSE`s rules, this is a Category 3 Transaction.
By order of the Conafex Board
12 October 2004
Registered Office
6 rue Adolphe Fischer,
L-1520, Luxembourg
Corporate Finance Advisor and Sponsor to Conafex
Imara Corporate Finance South Africa (Pty) Limited
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