NSX - KAP - KAP acquires an interest in Brenner Mi
KAP
KAP
NSX - KAP - KAP acquires an interest in Brenner Mills
KAP International Holdings Ltd
Registration number: 1978/000181/06
Share code: KAP
ISIN: ZAE000059564
("KAP" or "the Company")
KAP ACQUIRES AN INTEREST IN BRENNER MILLS
KAP has entered into a heads of agreement to acquire 60% of the equity in
Brenner Mills (Pty) Ltd ("Brenner") for a cash consideration. Brenner
generates revenues of approximately R700 million per annum and total assets
approximate R140 million.
Brenner`s operations comprise one of the oldest and largest maize milling
businesses in South Africa with impeccable milling facilities in Makhado,
Bela Bela, Hammanskraal and Phafutatjijaba.
Brenner Mills was founded by Chaim Brenner 74 years ago and the current
managing director, Steven Brenner, has in recent years diversified Brenner
into animal feed production and packing and distribution of a wide range of
dry-goods foodstuffs.
The proposed transaction will see the marriage of two of South Africa`s iconic
food brands being KAP`s "Bull Brand" and Brenner`s "Shaya" maize meal. The
merger will expand the basket of retail food offerings within the KAP
stable to be distributed through the complementary market channels of Bull
Brand and Brenner.
The acquisition is subject to various conditions precedent, including a due
diligence and approval by regulatory authorities.
The agreement includes a put and call option for the vendors and KAP
exercisable on 1 July 2009, in respect of the remaining 40% equity in
Brenner, the pricing of which will be determined by the profits of Brenner
from October 2006 to that date and payment for which will be by issue of
KAP shares.
The transaction includes a substantial recapitalisation of Brenner by all
shareholders, to the extent of R36 million, to alleviate a high level of
gearing and provide capital for expansion and growth of Brenner`s
operations.
Paarl
13 December 2006
Sponsor
PSG Capital Limited
Date: 13/12/2006 16:42:02 Produced by the JSE SENS Department.
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