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ROLFES HOLDINGS LIMITED - Acquisition of the Equity in Agchem Properties Proprietary Limited (Agchem Properties)

Release Date: 18/03/2014 08:00:00      Code(s): RLF     
(Incorporated in the Republic of South Africa)
(Registration Number: 2000/002715/06)
JSE Share Code: RLF
ISIN: ZAE0000159836
(?Rolfes? or ?the Company?)


1.   Introduction
Shareholders are advised that Rolfes has entered into an agreement in terms
of which Rolfes will acquire the entire issued share capital in Agchem
Properties together with any claims which the sellers have against Agchem
Properties (?the Equity in Agchem Properties?)(?the Transaction?).

2.   Business of Agchem Properties and Transaction rationale
In 2011 Rolfes acquired 70% of Agchem Holdings Proprietary Limited
(?Agchem?), a group of companies that procures, produces and distributes
high-quality agri-chemical products. Agchem Properties? is a property owning
company and its sole asset is the Waltloo Pretoria property currently leased
by Agchem and which is Agchem?s principal place of business, and the vacant
adjacent land. The acquisition of Agchem Properties is therefore of strategic
importance to Agchem and Rolfes believes that the terms of the Transaction
will be financially beneficial to the Company. The vacant land acquired as
part of the Transaction is important to cater for the future expansion of the
current Agchem factory, the proposed new Plant Growth Promoting Rhizobacteria
plant and warehousing.

3.   Salient features of the Transaction
The purchase consideration in respect of the Equity in Agchem Properties is
an amount of R17, 6 million payable in cash upon all conditions to the
Transaction being fulfilled. Rolfes will fund this from debt facilities.

The sellers in respect of the Equity in Agchem Properties are as follows:

   ?   The trustees for the time being of the HAD Family Trust;
   ?   The trustees for the time being of the SP Naude Family Trust;
   ?   The trustees for the time being of the Pretorius Family Trust; and
   ?   Tanglewood Private Equity Company Proprietary Limited, (?the Sellers?).

The effective date of the Transaction is 1 January 2014.

The Transaction is conditional upon:

   ?   Rolfes confirming by 31 March 2014 to the Sellers and/or any other
       party that they have been released from their obligations in respect of
       any sureties provided for the benefit of Agchem Properties;
   ?   the Sellers confirming by 31 March 2014 to Rolfes that that they have
       obtained the release of Agchem Properties from its obligations in
       respect of any sureties provided by it to third parties;
   ?   obtaining any regulatory approvals required for the implementation of
       the Transaction; and
   ?   Rolfes providing confirmation to the Sellers that it has secured the
       funding necessary for the Transaction.
The Sellers have provided warranties and indemnities which are normal for a
transaction of this nature.

4.   Financial information in respect of the Transaction
The unaudited pro forma financial effects, for which the directors are
responsible, are provided for illustrative purposes only to show the effect
of the Transaction on net asset value and net tangible asset value per share
as if the Transaction had taken effect on 31 December 2013. The pro forma
financial effects on earnings per share and headline earnings per share as
well as the profits attributable to the assets that are the subject of the
Transaction are not significant and therefore are not shown. Because of their
nature, the unaudited pro forma financial effects may not give a fair
presentation of the financial position of Rolfes. The unaudited pro forma
financial effects have been compiled from the unaudited financial statements
of Agchem Properties for the ten month period ended 31 December 2013 and are
presented in a manner consistent with the format and accounting policies
adopted by Rolfes and have been adjusted as described in the notes.

                                              Before the     After the   Change
                                             Transaction   Transaction        %

Net asset value per share (cents)                  243,4         243,4        -
Tangible net asset value per share (cents)         123,5         117,7    (4.8)

Shares in issue (?000)                           108 609       108 609        -


1. The "Before the Transaction" column reflects the unaudited results of
    Rolfes for the six months ended 31 December 2013.
2. The "After the Transaction" column reflects what the results would have
    been had the Transaction been effective as 31 December 2013.
3. Adjustments have been made using the management accounts of Agchem
    Properties for the ten months ended 31 December 2013, including fair value
    adjustments. Rolfes has satisfied itself with the quality of these
    management accounts.
4. Key assumptions include the funding of the transaction with long term
    debt. Transaction costs are not material.
5. The net assets that are the subject of the Transaction amount to R 11, 3

5.   Small related party transaction
In terms of s10.1 of the JSE Limited (?the JSE?) Listings Requirements (?the
Listings Requirements?) the Sellers are considered a related party in
relation to Rolfes by virtue of the fact that SP Naude Family Trust and the
Pretorius Family Trust are, in terms of the Listings Requirements, considered
associates of directors of subsidiaries of Rolfes. The Transaction is
classified as a small related party transaction in terms s10.7 of the
Listings Requirements.

Mazars acting as an independent professional expert to the Company has
provided the JSE with written confirmation that the terms of the Transaction
are fair to the shareholders of Rolfes.

Mazars? fairness opinion will lie open for inspection at the registered
office of the Company for a period of 28 days from the date of this

Jet Park
18 March 2014

Grindrod Bank Limited

Independent expert

Date: 18/03/2014 08:00:00 Supplied by www.sharenet.co.za                     
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