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Announcement regarding the acquisition of the trading assets and liabilities of Brigit
HUDACO INDUSTRIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1985/004617/06)
Share code: HDC & ISIN: ZAE000003273
(“Hudaco”)
ANNOUNCEMENT REGARDING THE ACQUISITION OF THE TRADING ASSETS AND LIABILITIES OF
BRIGIT FIRE (PROPRIETARY) LIMITED, BRIGIT SYSTEMS (PROPRIETARY) LIMITED AND PORTAGAS
(PROPRIETARY) LIMITED
1. INTRODUCTION
Shareholders are advised that Hudaco has entered into an agreement (“the Agreement”) with
Brigit Fire (Proprietary) Limited, Brigit Systems (Proprietary) Limited and Portagas (Proprietary)
Limited (collectively “Brigit” or “the Seller”) to acquire the trading assets and liabilities of Brigit
with effect from the first day of the month following the fulfilment of the final suspensive
conditions as set out in paragraph 4.3 below (“the Effective Date”) (“the Transaction”). The
Effective Date is expected to be 1 September 2023
2. DESCRIPTION OF BRIGIT
Brigit is a South African group that offers “One Source Total Fire Protection” that includes fire
detection, fire containment protection and fire suppression systems. Brigit distributes several
products that it has developed itself, along with leading international products, throughout Sub-
Saharan Africa. The products offered are singularly focused on fire security and safety disciplines,
specifically required for commercial and industrial applications. Brigit has 65 employees in three
locations in South Africa and generates revenue of about R215 million per year.
The ultimate beneficial owner of Brigit is Van Zyl Trust, the beneficiaries of which are Deon van
Zyl and his immediate family members. The Seller is not a “related party” as defined in terms of
the JSE Limited Listings Requirements (“JSE Listings Requirements”).
3. RATIONALE FOR THE TRANSACTION
Hudaco specialises in the importation and distribution of selected high-quality branded
automotive, industrial and electronic consumable products, mainly in the southern African
region. One of Hudaco’s key strategies is to acquire new businesses in similar fields of activity
when the opportunity arises.
The Transaction is consistent with Hudaco’s strategy of diversifying its portfolio. The business of
Brigit is an ideal fit for Hudaco in that it focuses on supplying quality, branded products and
services, while providing significant value-add for the customer, which is an area of core
competency of Hudaco. The fire security offering of Brigit will complement and enhance the
range of products and services that Hudaco already offers to the security sector through its Elvey
Security Technologies and Pentagon businesses. They will work together in developing their route
to market and expanding the combined customer base. Hudaco will be able to utilise its
experience and expertise in value-added distribution to enhance Brigit’s market position,
resulting in long term benefits to shareholders.
4. DETAILS OF THE TRANSACTION
4.1 Purchase consideration
The purchase consideration (“the Consideration”) will be a multiple of the average annual
profit after tax (but excluding interest received) of Brigit for the two years following the
Effective Date. The maximum Consideration is R315 million.
The Consideration will be funded from cash generation, existing and (if necessary) new
facilities and paid as follows:
• an initial amount of R143 million payable in cash on the Effective Date; and
• two tranches payable in cash on the first and second anniversary of the Effective
Date, based on actual average levels of profitability achieved in each of those years.
4.2 Management
Deon van Zyl, the managing director, has agreed to enter into a service contract for a period
of two years and has, as part of the Agreement, entered into a restraint of trade
arrangement in favour of Hudaco for a period of three years after his employment ceases.
4.3 Conditions precedent
The Transaction is subject to the completion of several suspensive conditions by no later
than 24 August 2023, including:
• the satisfactory outcome of a due diligence review;
• approval from major suppliers and customers;
• the signing of a lease agreement over the primary premises;
• signing of a service agreement with the managing director; and
• Hudaco board approval and regulatory approvals, as applicable
It is also subject to Competition Commission approval by 23 September 2023.
4.4 Value of net assets and profit attributable to Brigit
Brigit produced R36 million net profit after taxation in the financial year ended 28 February
2023 and has committed to deliver a minimum of R55 million net trading assets on the
Effective Date.
The financial information has been compiled from the unaudited annual financial
statements of the companies comprising Brigit for the year ended 28 February 2023, which
have been prepared in terms of International Financial Reporting Standards for Small and
Medium-Sized Entities.
5. REPRESENTATIONS AND WARRANTIES
The agreement contains representations and warranties by the parties in favour of one another
which are standard for transactions of this nature.
6. CATEGORISATION
The Transaction has been classified as a category 2 transaction in terms of Section 9 of the JSE
Listings Requirements and, accordingly, shareholder approval is not required.
Johannesburg
30 May 2023
Corporate advisor and sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 30-05-2023 10:40:00
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