LONG4LIFE LIMITED - Announcement relating to the acquisition by Long4Life of Inhle Beverages

Announcement relating to the acquisition by Long4Life of Inhle Beverages

LONG4LIFE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2016/216015/06)
Share code: L4L ISIN: ZAE000243119
("Long4Life" or "the Company")

ANNOUNCEMENT RELATING TO THE ACQUISITION BY LONG4LIFE OF INHLE BEVERAGES

1. INTRODUCTION

   Pursuant to the cautionary announcement released on the Stock Exchange News Service
   of the JSE Limited (“JSE”) on 5 July 2017 and the further cautionary announcement
   released on 5 August 2017 (collectively “the Cautionary Announcements”), the board of
   directors of Long4Life (“the Board”) is pleased to announce that it has concluded a Share
   Purchase Agreement to acquire the entire issued share capital of Inhle Beverages
   Proprietary Limited (“Inhle”) (“the Acquisition”).

2. RATIONALE FOR THE ACQUISITION

   The Board is of the opinion that the Acquisition of Inhle will provide a solid and strategic
   platform from which a beverage cluster can be created within Long4Life, including an
   opportunity to build a beverage business of scale through both organic and acquisitive
   growth. Furthermore, Inhle recently secured a liquor licence (for packaging purposes),
   representing an additional industry opportunity to expand and grow Inhle’s presence in
   the beverage sector.

3. OVERVIEW OF INHLE

   Inhle is a well-established contract packaging business located in Heidelberg, Gauteng,
   specialising in the canning and bottling of carbonated soft drinks, natural mineral water
   and energy drinks.

   Having been established in 2003 with one production line, the business has grown to be
   the second largest beverage contract packaging business in South Africa, currently
   employing around 300 staff. Inhle has seven production lines, with considerable scope
   for expansion.

   The existing management team will continue to be employed in the business.

4. PURCHASE CONSIDERATION AND CONDITIONS PRECEDENT

   The maximum purchase consideration is R360 million, based on a 6x multiple of forecast
   EBITDA for Inhle’s financial year to 28 February 2018 of R60 million, which EBITDA remains
   to be confirmed during the due diligence exercise referred to hereunder. Based on
   management accounts as at 31 July 2017, Inhle’s tangible net asset value amounts to
   R53.8 million. Anticipated EBITDA is referred to above.

   The Acquisition, which is effective 1 July 2017, is subject to certain conditions precedent,
   all of which are expected to be fulfilled by 31 October 2017, including:

   -   certain regulatory approvals (including, but not limited to, the Competition
       Authorities); and
   -   completion of a due diligence investigation to the satisfaction of Long4Life.

   The purchase consideration will be settled through a combination of cash and Long4Life shares,
   the latter to be issued based on the volume weighted average price (VWAP) of L4L Shares traded
   during the 5 (five) trading day period immediately preceding the closing date, this following
   fulfilment (or waiver, as the case may be) of the last of the conditions precedent.

   The Share Purchase Agreement contains warranties and indemnities that are standard for
   a transaction of this nature.


5. CATEGORISATION

   The Acquisition is classified as a Category 2 transaction for Long4Life in terms of the
   Listings Requirements of the JSE.

   There is no matter in the constitutional documents of Inhle which will preclude Long4Life
   from continuing to comply with its obligations in terms of the Listings Requirements of
   the JSE.

6. CAUTIONARY ANNOUNCEMENT

   Shareholders are advised that the Cautionary Announcements (which pertained to the
   Acquisition) are hereby withdrawn. Shareholders are however referred to the Firm
   Intention Offer by Long4Life announced on 25 July 2017 pertaining to the proposed
   acquisition of the entire issued share capital of Holdsport Limited, and are accordingly
   advised to continue to exercise caution when dealing in the Company’s securities until a
   further announcement in this regard is made.


Johannesburg
23 August 2017

Financial advisor and Sponsor
The Standard Bank of South Africa Limited

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