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The Bidvest Group Limited - Acquisition By Bidvest Of Deli Xl From Ahold Group
And Cautionary Announcement
THE BIDVEST GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1946/021180/06)
Share code: BVT ISIN: ZAE000050449
(`Bidvest`)
ACQUISITION BY BIDVEST OF DELI XL FROM AHOLD GROUP AND CAUTIONARY ANNOUNCEMENT
1. Introduction
Bidvest announces that it has entered into an agreement, under the terms of
which it will acquire 100% of the issued share capital of Deli XL B.V. (`Deli
XL`), a company incorporated in the The Netherlands, from Koninklijke Ahold N.V.
(`Ahold`) (`the vendor`), subject to the fulfillment of the condition precedent
referred to in paragraph 5 below (`the acquisition`).
HSBC Bank plc is acting as transactional financial advisor to Bidvest in
relation to the acquisition.
2. History and nature of business
Deli XL is the market leading delivered foodservice wholesaler in The
Netherlands (estimated 13% market share) and Belgium (estimated 4% market
share), with Deli XL Belgium also providing foodservice products to the
Luxembourg institutional market, having combined sales in 2004 of Euro819
million. Consolidation of the foodservice industry in these markets has started
and Bidvest intends partaking in such process.
Deli XL`s Dutch customer base consists of approximately 30 000 clients across
three principal segments, being institutions, catering and regional hospitality,
with a particularly strong position in the institutions and catering segments.
Deli XL`s Belgium customer base of approximately 4 000 clients is segmented into
two sectors, being institutions and catering & key accounts.
3. Rationale
The acquisition of Deli XL will compliment the existing foodservice business of
Bidvest in the United Kingdom. Europe represents a strategic market with growth
opportunities in which to continue expanding Bidvest`s international interests
in the foodservice industry. The acquisition provides a unique opportunity to
acquire a market leading European foodservice business with sufficient scale to
realise customer and purchasing synergies.
Whilst Deli XL currently has below average returns, as part of the Bidvest
foodservices division with Bidvest`s management focus, it is expected to
contribute significantly to group performance over time.
4. Salient Terms of the acquisition
Bidvest will purchase 100% of the issued shares in Deli XL from the vendor for a
consideration of approximately Euro56.7 million and will procure that Deli XL
will repay its outstanding net inter-company debt obligations to Ahold on
completion, valuing Deli XL at an enterprise value of approximately Euro140
million. The acquisition will be funded from existing banking facilities of
Bidvest.
The vendor has given warranties which are usual in a transaction of this nature.
5. Condition Precedent
The acquisition is subject to receiving European Union competition clearance.
6. Effective Date of the acquisition
The effective date of the acquisition is expected to be in the third quarter of
the year, once European Union competition clearance is obtained.
7. Financial effects of the acquisition
The table below sets out the pro forma financial effects of the acquisition for
the 6 month period ended December 31 2004. This is provided for illustrative
purposes only.
Published Pro forma Increase / Differenc
before after (decrease) %
Earnings per share (cents) 319.2 323.3 4.1 1.3%
Headline earnings per share 319.5 323.6 4.1 1.3%
(cents)
Net asset value per share 2,184.1 2,188.1 4.0 0.2%
(cents)
Net tangible asset value per 1,500.8 1,345.6 (155.2) -10.3%
share (cents)
Number of shares in issue 304.729 304.729
(million)
Weighted average number of 302.991 302.991
shares (million)
The `Pro forma after` column assumes that:
- the acquisition was implemented with effect from July 1 2004 to determine the
earnings and headline earnings financial effects and at December 31 2004 to
determine the net asset value and tangible net asset value financial effects;
- the financial effects have been determined using Deli XL`s forecast earnings
for the six months to 31 December 2005 and a net asset value of approximately
nil;
- an exchange rate of R8.0848 / Euro1 was applied to convert the financial
results of Deli XL to Rand; and
- an average interest rate of 2.5 % per annum before tax for the six months
ended December 31 2004 was paid on the consideration and the loan indebtedness.
8. Categorisation of the acquisition
The acquisition is not a categorised transaction in terms of the JSE Listings
Requirements, but in terms of section 9.16 of the JSE Listings Requirements, the
acquisition will result in Deli XL becoming a subsidiary company of Bidvest and
accordingly the articles of association of Deli XL will be amended to conform to
schedule 10 of the JSE Listings Requirements.
9. Cautionary announcement
Bidvest is continuing to explore business opportunities, both locally and
internationally, in relation to its foodservice business and Bidvest
shareholders are accordingly advised to exercise caution in dealing in their
shares until a further announcement in this regard is published.
Johannesburg
July 15 2005
Transaction Dutch legal Belgian legal
advisor advisory advisory
HSBC Bank plc Houthoff Liederkerke
Buruma Wolters
Waaelbroeck
Kirkpatrick
Advisor and lead
sponsor to Bidvest
Joint sponsor
Investec Bank Deutsche
Limited Securities
Date: 15/07/2005 09:40:05 AM
Produced by the JSE SENS Department
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