FINBOND GROUP LIMITED - Acquisition of Kitsismart (Pty) Ltd and KWT Finance (Pty) Ltd

Acquisition of Kitsismart (Pty) Ltd and KWT Finance (Pty) Ltd

Finbond Group Limited
(Registration number: 2001/015761/06)
Share code: FGL ISIN: ZAE000138095
("Finbond" or "the Company" or "the Group")

ACQUISITION OF KITSISMART (PTY) LTD AND KWT FINANCE (PTY) LTD

1. Introduction

Finbond shareholders are advised that King Loan Finance (Pty) Ltd, a 100%
subsidiary of the Group, has entered into an agreement for the acquisition of
Kitsismart (Pty) Ltd and KWT Finance (Pty) Ltd ("the Businesses") ("the
Transaction").

The Businesses are short-term consumer lenders with a total of five branches in
the Eastern Cape.

2. Nature of Finbond Business and Rationale for the Transaction

Finbond is a leading South-African and North American financial services
institution that specialises in the design and delivery of unique value and
solution-based credit products tailored to borrower requirements rather than
institutionalised policies and practices.

Finbond is a credit provider with both brick and mortar and online operations.
Finbond conducts its business through a total of 592 stores (411 in South
Africa, 181 in North America).

The rationale for the Transaction includes expanding Finbond's South African
store network to 416 and increasing profitability of Finbond's South African
operations.


3. The Transaction

3.1.   Nature of the Businesses

       The Businesses operate via their five branches in the Eastern Cape,
       offering short-term consumer loans with terms from one to three months.

       The Businesses' key strengths inter alia include:

       •   A proven and scalable credit offering;
       •   Focused cash generative short-term consumer loan products; and
       •   Effective sales and collection processes.

3.2.   Salient terms

       The salient terms of the Transaction are as follows:

       •   The purchase consideration payable by King Loan Finance (Pty) Ltd will
           be R25.75 million for 100% of the shares in the Businesses.
       •   100% of the purchase consideration set out above will be payable in
           cash on the effective date of the transaction, which is 1 September
           2024.
       •   The vendors in respect of the Transaction are Kitsismart (Pty) Ltd and
           KWT Finance (Pty) Ltd, represented by Mr. Steven Hatley and Mr. Mark
           Ahlin.
       •   The beneficial owners of the Businesses are Mr. Steven Hatley and Mr.
           Mark Ahlin, each owning a 50% interest in the Businesses.
       •   The net asset value and net profit before taxation of the Businesses
           amounted to R6.75 million and R3.93 million) respectively, based on
           unaudited annual financial statements for the financial year ended 29
           February 2024 for the Businesses.
       •   Included in the net profit before taxation of the Businesses for the
           financial year ended 29 February 2024 are expenses of R4.85 million
           which will not be applicable post-acquisition.

           The Businesses' unaudited annual financial statements have been
           prepared in accordance with International Financial Reporting
           Standards for Small and Medium-sized Entities.

3.3.   Condition precedent

       The Transaction remains subject to the following condition precedent, to
       be fulfilled by no later than 1 September 2024:

       •   As at the effective date, the loans and/or capital granted by the
           Businesses shall not have decreased by more than 3% (three percent) in
           aggregate for the period between July 2024 and August 2024.

4. Funding of the acquisition

Finbond intends to fund the Transaction from surplus cash on hand.

5. Categorisation of the Transaction

The Transaction is categorised as a Category 2 transaction in terms of the JSE
Limited Listings Requirements and is therefore not subject to Finbond
shareholder approval.

6. Memoranda of Incorporation

The provisions of the Memoranda of Incorporation of the Businesses do not
frustrate Finbond in any way from compliance with its obligations in terms of
the Listings Requirements. Nothing contained in the Memoranda of Incorporation
of the Businesses shall relieve Finbond from compliance with the Listings
Requirements.


Pretoria
28 August 2024

Sponsor:
African Bank Limited (Business and Commercial Banking Division)

Date: 28-08-2024 04:30:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.