LONG4LIFE LIMITED - Acquisition by Long4Life of Sorbet Holdings Proprietary Limited

Acquisition by Long4Life of Sorbet Holdings Proprietary Limited

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

ACQUISITION BY LONG4LIFE OF SORBET HOLDINGS PROPRIETARY LIMITED (“SORBET”)

1. INTRODUCTION

    Shareholders are referred to the Company’s Pre-Listing Statement of 31 March 2017, in which the
    Company stated its intention to acquire Sorbet. 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 Sorbet for a maximum consideration of R116 million, to be settled through a
    combination of cash and Long4Life shares (“the Acquisition").

2. OVERVIEW OF SORBET

    Sorbet is a beauty therapy hub with 186 franchise stores in South Africa and will shortly open its
    fifth company-owned store in the United Kingdom. Sorbet offers a range of professional beauty
    therapy treatments, as well as premium body and skincare products for women and men. The
    business operates through various store formats including Sorbet Salon (for all-round beauty
    therapy), Sorbet Dry Bar (express hairstyling), Sorbet Man (men's grooming) and Candi & Co (ethnic
    hair treatments and hairstyling).

3. RATIONALE FOR THE ACQUISITION

    The Acquisition presents an attractive opportunity which is aligned to the Company’s strategy of
    seeking investments with a lifestyle focus. The Board believes that Sorbet, having established a well-
    recognised brand and a nationwide footprint, represents an excellent platform for Long4Life to
    expand its interests in the health, beauty and grooming arena, both organically and through
    acquisitions.

4. CONDITIONS PRECEDENT AND WARRANTIES

    The Acquisition is subject to the following conditions precedent, all of which are expected to be
    fulfilled by 31 August 2017, notwithstanding which the effective date for the Acquisition is 1 April
    2017 (“the Effective Date”):

    - the finalisation of the shareholding and related shareholders agreements pertaining to Sorbet’s
      international operations;
    - the conclusion of service and restraint agreements with key employees;
    - the finalisation of Sorbet’s Audited Financial Statements for the period ended 31 March 2017;
    - confirmation of the release from existing pledge and cession arrangements in regard to certain
      of the sale shares;
    - the entering into of pledge and cession agreements by the Sorbet shareholders in favour of
      Long4Life; and
    - confirmation by Long4Life that it is satisfied that no material adverse change in regard to
      Sorbet’s business has occurred between the Effective Date and the closing date of the
      Acquisition.

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

5. FINANCIAL INFORMATION

   Based on Sorbet’s draft financial statements for the 10-month period ended 31 March 2017 relating
   to its primary operations, Sorbet’s annualised attributable EBITDA approximates R14.2 million.
   Sorbet’s tangible net asset value at the effective date approximates R5.2 million, it being noted that
   intangible assets and goodwill attributable to the Sorbet brand and trademarks will be fair valued
   at the Effective Date.

6. CATEGORISATION

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

Johannesburg
14 July 2017

Financial advisor and Sponsor to Long4Life
The Standard Bank of South Africa Limited

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