| Tue 18 Apr 2006, 7:30 | | Wellco - Acquisition Of Nutribrands |
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WLL
WLL
Wellco - Acquisition Of Nutribrands
Wellco Health Limited
(formerly Nungu Trading 279 (Pty) Ltd)
(Incorporated in the Republic of South Africa)
(Registration number 2005/005805/06)
Share code: WLL ISIN: ZAE000071841
("Wellco" or "the company")
ACQUISITION OF NUTRIBRANDS
1. INTRODUCTION
River Group is authorised to announce that, following the renewed
cautionary announcement dated 31 March 2006, Wellco Health Limited entered
into a contract with Nutribrands (Pty) Ltd on 3 April 2006 and have
acquired with effective date 1 April 2006 all intellectual property and
incidental assets of Nutribrands (Pty) Ltd ("Nutribrands") on a going
concern basis.
2. ACQUISITION AND PURCHASE CONSIDERATION
Wellco has entered into an agreement to purchase 51% of Nutribrands for
R3,67 million with effect from 1 April 2006 and will hold an option to
purchase the 49% balance within 90 days after 1 April 2008 based on certain
profit warranties.
3. BACKGROUND AND RATIONALE
Nutribrands develops, manufactures and distributes two ranges of products;
Nutrimax sports nutrition and the Skin Nutrition range of cosmeceuticals.
The products within both brands consist of state-of-the-art proprietary
formulations and are considered to be leaders in their category, from a
quality and technology perspective.
The sports nutrition category, within the complementary health sector,
accounts for 9% (R220m) of the total R2.3bn market. There has been
significant growth in this category and Wellco believes that the Nutrimax
brand is ideally placed to experience strong growth with the marketing and
operational support to be supplied by Wellco Brands. In addition, Nutrimax
will be integrated into the foreign export structures and private label
business. This will increase distribution and revenue opportunities.
The Nutrimax sports nutrition range of supplements is sold through the
Clicks chain, Dis-Chem, independent pharmacies, health shops, gyms, sports
shops, personal trainers and juice bars, while the Skin Nutrition
cosmeceutical range is sold exclusively through Edgars department stores
and to independent beauty salons.
The sports nutrition range offers products to those persons seeking
improved performance, maximizing weight loss, enhanced energy levels, and
better nutrition. Cosmeceuticals represent those cosmetic products that
have therapeutic effects on the skin. Skin Nutrition products are
specifically designed to reverse the signs of ageing by penetrating deep
below the surface of the skin with advanced anti-aging ingredients created
to prevent cellular inflammation while promoting cellular renewal.
Cosmeceuticals represent the fastest growing sector in the cosmetic
industry worldwide.
4. TRANSACTION STRUCTURE AND FINANCIAL EFFECTS OF THE TRANSACTIONS
The purchase consideration will be settled in cash by way of a vendor
placement by Wellco within the next thirty days.
The table below sets out the unaudited reviewed pro forma financial effects
of the transaction based on Wellco"s published reviewed interim results for
the period ended 31 August 2005 and the Prospectus dated 15 September 2005.
The unaudited reviewed pro forma financial effects are presented for
illustrative purposes only and because of their nature may not give a fair
reflection of Wellco"s results, financial position and changes in equity
after the transaction. It has been assumed for purposes of the pro forma
financial effects that the transactions took place with effect from 1 March
2005 for income statement purposes and 31 August 2005 for balance sheet
purposes. The directors of Wellco are responsible for the preparation of
the unaudited reviewed pro forma financial effects.
Actual Pro forma Percentage
"before" "after" (2) change
(1)
Number of shares in issue 56 827 842 65 013 026 14,40%
Earnings per share (0,68) (1,02) (50%)
(cents) (3)
Headline earnings per (0,55) (0,91) (65%)
share (cents) (3)
Net asset value per share 51,81 50,95 (1.66%)
(cents) (4)
Net tangible asset value 9,22 9,28 (0,65%)
per share (cents) (4)
Notes:
1. Extracted from the unaudited interim financial statements and pre-
listing statement of Wellco for the six months ended 31 August 2005.
2. Unaudited pro forma financial effects of the issue of 8,185,184 shares
at 45 cps and the losses for 6 months of Nutrimax.
3. In relation to the pro forma earnings and headline earnings per share,
it has been assumed that the proposed transactions was effective on 1
March 2005; and
4. In relation to the net asset value and net tangible asset value per
share, it was assumed that the transaction was effective on 31 August
2005.
5. CONDITIONS PRECEDENT
All conditions precedent have been met.
Pretoria
13 April 2006
Corporate and Designated Advisor
River Group
Warning: The listing of ordinary shares in the company is on the AltX.
Shareholders are advised of the risks of investing in a company listed on the
AltX. Shareholders are advised that the JSE does not guarantee the viability or
the success of a company listed on the AltX. In terms of the JSE Listings
Requirements a Designated Advisor has to be retained by the company. The
Designated Advisor is required to, inter alia, attend all board meetings held by
the company to ensure that all JSE Listings Requirements and applicable
regulations are complied with, approve the financial director of the company and
guide the company in a competent, professional and impartial manner. If the
company fails to retain a Designated Advisor it must make arrangement to appoint
a new Designated Advisor within 10 business days, failing which the company
faces suspension of trading of its securities. If a Designated Advisor is not
appointed within 30 days of its suspension the company faces the termination of
its listing without an offer to minority shareholders.
Date: 18/04/2006 07:30:05 AM Produced by the JSE SENS Department
