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WLL
WLL
Wellco Health Limited - Update on Nutribrands Acquisition
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 Health" or "the company")
Update on Nutribrands Acquisition
1 INTRODUCTION
With reference to the acquisition announcement dated 18 April 2006
River Group is authorised to announce that Wellco Health Limited have
acquired with effective date 1 September 2006 the remaining 49% of the
intellectual property and incidental assets of Nutribrands (Pty) Ltd
("Nutribrands") and the Nutrimax brand on a going concern basis.
2 ACQUISITION AND PURCHASE CONSIDERATION
Wellco has entered into an agreement dated 29 November 2006 with
Richard Gregory Purvis ("the Vendor") to purchase the remaining 49% of
the Nutrimax brand for R1,290,420 with effect from 1 September 2006
and sell the Skin Nutrition brand for R380,170 back to the Vendor. The
net effect being a purchase consideration of R910,250.
3 BACKGROUND AND RATIONALE
Nutribrands develops, manufactures and distributes two ranges of
products; Nutrimax sports nutrition and the Skin Nutrition range of
cosmeceuticals. The Nutrimax sports nutrition range is distributed
through the Wellco Brands (Pty) Ltd ("the subsidiary") existing retail
channels and has been integrated into the existing sales and marketing
functions of the business. The Skin Nutrition range is distributed
through a stand-alone structure outside the Wellco Brands core retail
channel footprint.
The Board has decided to focus on Wellco Brands core retail channels
and consolidate their product mix within the complimentary health
category. Nutrimax Sports Nutrition sits comfortably within this
growing R2,3bn market. Of this market approximately R300m is
attributable to the sports nutrition industry. The Skin Nutrition
range sits outside this category and is considered to be non-core to
the category and Wellco Brand"s product ranges.
The sale of the Skin Nutrition business will allow Wellco Brands to
remove itself from this current marginal revenue business and remove
the high head count commitments attached to competing in this
category. Wellco Brands will focus on the positive revenue generating
business of Nutrimax Sports Nutrition and free up funds for investment
in the anticipated exciting new product extensions.
4 TRANSACTION STRUCTURE AND FINANCIAL EFFECTS OF THE TRANSACTIONS
The purchase consideration will be settled in cash by Wellco within
the next thirty to sixty days.
These transactions will have no significant effect on the EPS, HEPS,
NAV, TNAV and current business of Wellco.
5 CONDITIONS PRECEDENT
The payment is to be made in three tranches, the latest being the 15
December 2006. The first tranche has been completed with the second
tranche by 8 December 2006.
Pretoria
05 December 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: 05/12/2006 05:05:03 PM Produced by the JSE SENS Department
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