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Disposals of assets of Schirm U.S.A., Inc., Baar-Ebenhausen assets of Schirm GmbH and Food & Beverage business
AECI LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1924/002590/06
Share code: AFE ISIN: ZAE000000220
Hybrid code: AFEP ISIN: ZAE000000238
Bond company code: AECI
LEI: 3789008641F1D3D90E85
(AECI or the Company)
DISPOSALS OF THE ASSETS OF SCHIRM U.S.A., INC. AND THE BAAR-EBENHAUSEN ASSETS OF SCHIRM GMBH, AND DISPOSAL OF THE FOOD
AND BEVERAGE BUSINESS
DISPOSAL OF THE ASSETS OF SCHIRM U.S.A., INCORPORATED
1. INTRODUCTION
1.1. Shareholders and noteholders are hereby advised that on 17 July 2025 ("Signature Date"), a wholly owned
subsidiary of AECI, Schirm GmbH ("Schirm Germany" or the "Parent") and Schirm U.S.A., Inc.
("Schirm USA" or the "Seller"), a wholly owned subsidiary of Schirm Germany, entered into an asset
purchase agreement ("Agreement") with Liberation Chem-Toll, LLC ("Chem-Toll" or the "Buyer") in terms
of which Schirm USA will dispose of and assign to Chem-Toll, substantially all of the assets
("Purchased Assets") and certain specified liabilities ("Assumed Liabilities") of Schirm USA, for the
consideration set out in paragraph 4.1 ("Disposal Consideration"), ("Disposal").
1.2. Chem-Toll, a newly established Texas limited liability company, was formed for purposes of acquiring the
Purchased Assets and assuming the Assumed Liabilities. Chem-Toll is wholly owned by members of
Schirm USA's Senior Management team, comprising Mr Chad Kern (Chief Executive Officer),
Mr Cody Helm (Chief Financial Officer), and Ms Rebecca Rodgers (Chief Operating Officer). Neither the
Senior Management team nor the Buyer are "related parties" to AECI, as defined in the JSE Limited Listings
Requirements ("Listings Requirements").
1.3. The Disposal will be subject to the fulfilment or waiver of the Conditions (as envisaged in paragraph 4.2).
2. OVERVIEW OF SCHIRM USA
2.1. Schirm USA is a chemical toll manufacturer in the United States of America, with formulation, packaging
and warehouse facilities strategically located in North Texas and Southern Illinois. Schirm USA processes
and produces chemicals for customers in various industries, including agriculture, industrial chemicals and
speciality products through the provision of, inter alia, liquids, powders, extruded granules, pellets and
impregnated granules.
2.2. The value of Schirm USA's net assets as at 31 December 2024 was R994.5 million and the profits
attributable thereto for the year ended 31 December 2024 was R9.4 million.
2.3. The values attributable to the net assets and the profits attributable thereto have been extracted from
Schirm USA's management accounts for the year ended 31 December 2024, which were prepared in
accordance with International Financial Reporting Standards (IFRS®).
3. RATIONALE FOR THE DISPOSAL
3.1. As previously disclosed to shareholders and noteholders and in alignment with AECI's strategy of
optimising its portfolio to create a platform for growth, AECI is focusing on its AECI Mining and
AECI Chemicals businesses and divesting from businesses with limited synergies with the chosen core
businesses.
3.2. This strategic shift aims to streamline operations, enhance efficiency and leverage in-house expertise. By
concentrating efforts on areas where AECI has a competitive advantage and strong market potential, AECI
will be positioned for sustainable growth and improved performance.
4. SALIENT TERMS OF THE DISPOSAL
The salient terms and conditions of the Disposal, and other salient information pertaining to the Disposal, are set
out below:
4.1. Disposal Consideration
4.1.1. In terms of the Agreement, the Disposal Consideration payable in respect of the Purchased Assets
will be an amount of US$60 million (approximately R1.074 billion, based on the US$:R exchange
rate of R17.90:$1 as at the Signature Date ("Exchange Rate")), payable by the Buyer to
Schirm USA as follows:
4.1.1.1. US$40 million (approximately R716 million, based on the Exchange Rate), payable in
cash on the Closing Date (as defined in paragraph 4.3); and
4.1.1.2. US$20 million (approximately R358 million, based on the Exchange Rate), through the
issuance of two convertible secured subordinated promissory notes ("Seller Notes"),
to be executed by the Buyer in favour of Schirm USA, dated as at the Closing Date and
generally payable within five years of issue. A Seller Note is defined as a form of debt
financing where the seller of a business provides a loan to the buyer in order to assist
in financing the purchase. The seller formally agrees to receive a portion of the
purchase price, i.e., a portion of the acquisition proceeds, in a series of future payments.
4.1.2. The Disposal Consideration is subject to customary adjustments based on Schirm USA's working
capital amounts ("Working Capital Adjustment"), which Working Capital Adjustment will not
exceed USD$4 million (approximately R72 million, based on the Exchange Rate),
("Maximum Working Capital Adjustment").
4.2. Conditions to the Disposal
Implementation of the Disposal will be subject to the fulfilment or waiver of, inter alia, the following
conditions precedent by 31 August 2025 ("Drop Dead Date"):
4.2.1. in respect of the Seller:
4.2.1.1. the written consent of the Parent's applicable lenders to enter into the Agreement and
execute the Seller Notes;
4.2.1.2. the representations, warranties and covenants of the Buyer are generally correct and
complied with, as applicable; and
4.2.1.3. the consent of the counterparties to certain of the Seller's contracts; and
4.2.2. in respect of the Buyer:
4.2.2.1. the execution of specified loan documents with a Texas banking association, including
but not limited to a subordination agreement in respect of the Seller Notes;
4.2.2.2. the representations, warranties and covenants of the Seller are generally correct and
complied with, as applicable;
4.2.2.3. the consent of the counterparties to certain of the Seller's contracts; and
4.2.2.4. no material adverse effect having occurred,
(collectively, the "Conditions").
4.3. Closing Date of the Disposal
The Closing Date of the Disposal, unless otherwise agreed to in writing between the Buyer and the Seller,
shall be the second business day following the satisfaction, or to the extent permissible, the waiver in
writing by the appropriate party, of the Conditions ("Closing Date").
4.4. Other significant terms of the Agreement
The Agreement contains warranties, indemnities, termination events, exclusivity provisions and other
undertakings which are customary for a transaction of this nature, including a right of the Buyer to terminate
the Agreement in the event that a material adverse effect has occurred at any time prior to the Closing Date.
5. APPLICATION OF THE DISPOSAL CONSIDERATION
The Disposal Consideration will be deployed in line with AECI's capital allocation framework.
6. CATEGORISATION OF THE DISPOSAL
The Disposal, taking into consideration the Disposal Consideration and the Maximum Working Capital
Adjustment, is classified as a category 2 transaction for AECI in terms of paragraph 9.5(a), read with
paragraph 9.8, of the Listings Requirements and is therefore not subject to AECI shareholder approval.
Shareholders and noteholders are hereby further advised of the following disposals which are uncategorised in terms
of paragraph 9.5, read with paragraph 9.8, of the Listings Requirements and are therefore not subject to
AECI shareholder approval:
VOLUNTARY ANNOUNCEMENT REGARDING THE DISPOSAL OF BAAR-EBENHAUSEN ASSETS
Schirm Germany entered into a sale agreement with German-based private buyers ("BEH Buyers"), in terms of which
Schirm Germany disposed of its assets in Baar-Ebenhausen, including the property, fixed assets and inventory relating
to the site ("BEH Assets") ("BEH Disposal"). Schirm Germany will transfer a lump sum of EUR 500?000 to cover
environmental liabilities.
Schirm Germany (the "Division") is focused on contract manufacturing services for both agrochemicals and specialty
chemicals, with capabilities spanning synthesis, formulation and packaging, together with related supply chain
solutions. The Division operates three key facilities across Germany: Baar-Ebenhausen ("BEH"), Lübeck ("HL") and
Schönebeck ("SBK"). BEH and HL concentrate on formulation, filling and packaging ("FFP") operations, while SBK
supports both FFP and synthesis, with additional specialised manufacturing functions.
The conclusion of the BEH Disposal has resulted in all risks and rewards associated with the BEH Assets transferring
to the BEH Buyers. AECI will benefit from a c. EUR3 million saving resulting from future restructuring costs and
environmental liabilities associated with the BEH Assets.
The BEH Disposal is in line with AECI's strategy of disposing non-core assets, coupled with its ongoing efforts to
turnaround the Schirm Germany business.
VOLUNTARY ANNOUNCEMENT REGARDING THE DISPOSAL OF FOOD & BEVERAGE BUSINESS
AECI has entered into a Share Purchase Agreement with a consortium comprising a South African-based private
equity fund for the disposal of the Food and Beverage business ("F&B"), (the "F&B Disposal"). The purchase
consideration payable in terms of the F&B Disposal is based on a cash price at closing date, with a capped potential
adjustment for working capital movements.
The F&B business, which operates as a division of AECI, supplies a range of technology driven and consumer-led
additives, ingredients and processing aids, including products and solutions for the beverage, dairy, health and
nutrition, and commodities industries. The F&B business will transfer to its new owners in its entirety, resulting in no
disruptions to ongoing operations, customers or employees, and ensuring business continuity as the business moves
forward under new management.
The successful conclusion of the F&B Disposal is expected to generate proceeds that will allow AECI to fulfil its
commitments and improve certain key performance indicators, particularly free cash flow generation. The transaction
remains subject to the fulfilment of standard regulatory approvals and is expected to be finalised before the end of the
year.
Holger Riemensperger, Chief Executive Officer of AECI, commented: "We are proud of the strong momentum of our
disposal programme and firmly believe that we are finding the best homes for our people and businesses. We are
committed to utilise proceeds from these disposals to reduce debt and reinvest into our core business. We are satisfied
with our current debt levels and business performances and have begun exploring inorganic growth opportunities".
Woodmead, Sandton
17 July 2025
Financial Adviser to AECI (Schirm U.S.A., Incorporated)
Stifel Europe Bank AG (Schirm USA and Baar-Ebenhausen Disposals)
Legal Adviser to AECI
Haynes and Boone, LLP (Schirm USA Disposal)
Financial Adviser to Chem-Toll
The CJ Group, PLLC
Legal Adviser to Chem-Toll
Platt Richmond, PLLC
Financial Adviser to AECI
Investec Bank Limited (F&B Disposal)
Legal Adviser to AECI
Bowman Gilfillan Incorporated (F&B Disposal)
Equity Sponsor: One Capital
Debt Sponsor: Questco Proprietary Limited
Date: 17-07-2025 02:45:00
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