| Wed 3 Aug 2005, 12:10 | | All Joy - Acquisition Of Ehlobo Foods |
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All Joy - Acquisition Of Ehlobo Foods
ALL JOY FOODS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1989/000100/06)
JSE Share code: ALJ & ISIN: ZAE000017240
(`All Joy` or `the Company`)
ACQUISITION OF EHLOBO FOODS
1. INTRODUCTION
Further to the announcement made on 3 June 2005, shareholders are advised
that, All Joy entered into an agreement with the shareholders of Ehlobo
Investment Advisory Services (Pty) Limited trading as Ehlobo Foods (`Ehlobo
Foods`) to acquire 100% of the shares and claims from the shareholders of
Ehlobo Foods (`the transaction`).
2. TERMS OF THE ACQUISITION
2.1 Purchase Consideration
The purchase consideration in terms of the acquisition is estimated to
be R 20 200 000 million and will be settled by the issuing of new
shares in All Joy at an issue price of 101 cents per ordinary All Joy
share.
The purchase consideration was based on Ehlobo Foods achieving an
after tax profit of R 2,5 for the period ending 30 June 2007.
All Joy will as part of the purchase consideration issue 6 060 000
shares at an issue price of 101 cents per share after signature of the
agreement for Ehlobo Foods for their involvement in the negotiations
of the Retailer Brands transaction and the securing of manufacturing
contacts.
2.2 Transaction Structure
All Joy acquired 100% of the entire issued share capital and claims in
from Ehlobo Holdings (Pty) Limited (`Ehlobo`), which is controlled by
Dr Ruiters and Mr Bagus. Dr Ruiters will be appointed to the All Joy
board as Non executive chairperson, Mr Bagus is currently a non-
executive director at All Joy.
2.3 Effective Date
The effective date of the acquisition is 1 July 2005
3. Rationale for the transaction
Ehlobo is a company owned by Dr Ruiters and Mr Bagus. They have significant
knowledge and contacts within the fast moving consumer goods industry.
Ehlobo is an empowerment company as defined by the Empowerment charter.
All Joy is a manufacturer of fast moving consumer goods and wish to extend
the current product range and client base. All Joy would need to enhance
its empowered credentials as defined by the Black Empowerment Charter in
order to give them access to more product ranges and delivery channels
4. Details of Ehlobo Foods
Ehlobo Foods was registered in 2005 as a company focusing on the
manufacturing and distributing Fast Moving Consumer Goods. Ehlobo Foods has
been successful in securing long term supply agreements, with multi-
nationals and strategic trade customers in South Africa and abroad.
5. Pro-forma financial effects
Table 1 setout the finical effects after the Ehlobo transaction, but before
the Retailer Brands transaction
5.1 The table below sets out the unaudited pro forma financial effects of
the transaction on the earnings, headline earnings and the net asset
value and tangible net asset value per All Joy share, based on the
assumption that:
5.1.1 for the purpose of calculating the earnings and headline
earnings per share as if the transaction was implemented on
1 March 2004 and using a weighted average of 45,4 million
ordinary All Joy shares in issue for the 12 months.
5.1.2 For the purpose of calculating the net asset value and net
tangible asset value per share, the transaction was effected
on 28 February 2005.
Before After Ehlobo Change (%)
(cents) (1) (cents)
Headline earnings and 6,3 4,73 (26,04)%
earnings per share (cents)
(2)
Net asset value per share 36,3 31,76 (12,51)%
(cents) (3)
Net tangible asset value 34,8 30,45 (12,51)
per share (cents) (3)
Notes:
1. Extracted from the audited financial statements of All Joy for the year
ended 28 February 2005.
2. Based on a weighted average of 45,4 million ordinary All Joy shares in
issue for the 12 months ended 28 February 2005.
3. Based on 47,9 million shares in issue at 28 February 2005.
Table 2 setout the finical effects after the Ehlobo transaction and after the
Retailer Brands transaction
5.2 The table below sets out the unaudited pro forma financial effects of the
transaction on the earnings, headline earnings and the net asset value and
tangible net asset value per All Joy share, based on the assumption that:
5.2.1 for the purpose of calculating the earnings and headline
earnings per share as if the transaction was implemented on
1 March 2004 and using a weighted average of 78,5 million
ordinary All Joy shares in issue for the 12 months.
5.2.2 For the purpose of calculating the net asset value and net
tangible asset value per share, the transaction was effected
on 28 February 2005.
Before After Ehlobo Change
(cents) (4) Foods and (%)
Retailer
Brands
(cents)
Headline earnings and earnings 6,3 12,09 91,86%
per share (cents) (5)
Net asset value per share (cents) 36,3 40,94 91,48%
(6)
Net tangible asset value per 34,80 12,61 (58,58)
share (cents) (6)
Notes:
4. Extracted from the audited financial statements of All Joy for the year
ended 28 February 2005.
5. Based on a weighted average of 78,5 million ordinary All Joy shares in
issue for the 12 months ended 28 February 2005.
6. Based on 80,1 shares in issue at 28 February 2005.
5.2 The financial effects contained in table 1 and 2 above have been
prepared for the purposes of illustrating how the transaction would
have affected the relevant financial results and position of All Joy
for the historical financial period indicated and on a pro forma
basis. Accordingly, such effects do not necessarily represent a true
reflection of the financial effects of the transaction on All Joy`s
current and future earnings.
6. Related party transaction and fair and reasonable opinion
In terms of the JSE Securities Exchange South Africa Listing Requirements
(`JSE Listing Requirements`) this transaction is a related party
transaction and Exchange Sponsors, as designated advisors, have therefore
been appointed by All Joy to advise the board of All Joy as to whether the
terms and conditions of the transaction are fair and reasonable.
7. Conditions precedent
The submission of a fair and reasonable opinion by Exchange Sponsors to the
board of directors of All Joy.
2 August 2005
Johannesburg
Designated Advisor
Exchange Sponsors
Date: 03/08/2005 12:00:07 PM
Produced by the JSE SENS Department
