Sharenet Sites 
Sharenet Sites
Acquisition of United Furniture Outlets (Pty) Ltd - A Cash Furniture Retailer
Lewis Group Limited
Registration Number: 2004/009817/06
Share Code: LEW
ISIN Code: ZAE 000058236
("Lewis" or "the Company")
ACQUISITION OF UNITED FURNITURE OUTLETS (PTY) LTD - A CASH FURNITURE RETAILER
1. Introduction
Shareholders are advised that Lewis Stores Proprietary Limited (“Lewis Stores”), a wholly-
owned subsidiary of the Company, has concluded an agreement with the shareholders
(“Vendors”) of United Furniture Outlets Proprietary Limited (“UFO”) in terms of which, amongst
other things, Lewis Stores will acquire the entire issued ordinary share capital and all
shareholders’ claims against UFO from the Vendors (“Acquisition”). The Vendors are Martini
Enterprises Group Limited, Philip Glick (the founder of UFO), Michael Yapanis and the LFC
Trust.
2. Overview of UFO
UFO is an independent, cash furniture retailer with a retail footprint of 30 stores. It sells a variety
of furniture including lounge, bedroom and dining room products. UFO is recognised as a luxury
brand with a value offering to the upper consumer spectrum, namely LSM 9-10+. The business
was established in 2004 and currently more than half of its stores are located in Gauteng.
3. Rationale for the Acquisition
The Acquisition will enable Lewis Stores to achieve improved economies of scale and provide a
platform to penetrate new market sectors through a wider, more exclusive product range.
Importantly, Lewis Stores is of the view that the Acquisition will diversify its offering by increasing
its cash-to-credit sales ratio and facilitate access to a higher income customer market segment
(LSM 9-10+).
The UFO brand and business model is scalable and offers an opportunity to extend the UFO
store footprint across South Africa and into neighbouring southern African countries.
4. Acquisition consideration
The Acquisition consideration (“Consideration”) is a cash amount of R320 million (plus interest if
applicable). R16 million of the Consideration will be deferred subject to confirmation of the net
asset value of UFO at the effective date.
Lewis Stores will utilise its current cash resources to pay the purchase price due in terms of the
Acquisition.
5. Net assets acquired and profits attributable to those assets
As reflected in the audited financial statements for the year ended 28 February 2017, UFO’s net
assets were R66.4 million and the attributable profit was R21.9 million. UFO’s audited financial
statements were prepared in accordance with International Financial Reporting Standards for
Small and Medium Enterprises.
Earnings before interest, payments to the Vendors and entities controlled by the Vendors, and
taxation was R40.4 million for the year ended 28 February 2017. Per the unaudited management
accounts for the 6 months ended 31 August 2017, this number increased by approximately 48%
over the corresponding period. The unaudited balance sheet as at 31 August 2017 reflects net
assets of R82.0 million. While Lewis Stores is satisfied with the quality of UFO’s unaudited
financial information for the period ended 31 August 2017, due to its unaudited nature, the
Company’s shareholders should exercise caution in placing reliance on the same.
6. Conditions precedent
The Acquisition is subject to the fulfilment (or waiver where applicable) by no later than
90 business days after the signature date, of certain conditions precedent (which are usual for a
transaction of this nature), including:
• the approval of the Competition Tribunal of the Acquisition;
• the approval of the Takeover Regulation Panel of the Acquisition; and
• certain of UFO’s lessors and third party funders providing consent to the change in
ownership of UFO.
7. Effective date
The effective date of the Acquisition will be the first day of the month in which all conditions
precedent have been fulfilled or waived, if those conditions are fulfilled or waived on or before the
15th of that month, or the 1st day of the succeeding month, if all conditions precedent are fulfilled
or waived after the 15th of that month.
8. UFO memorandum of incorporation
On implementation of the Acquisition, UFO will become a wholly owned subsidiary of Lewis
Stores, which is a wholly owned subsidiary of the Company. The Company confirms that:
• the provisions of UFO’s incorporation documents do not frustrate Lewis in any way from
compliance with its obligations in terms of the Listings Requirements of the JSE Limited
(“Listings Requirements”); and
• nothing in UFO’s incorporation documents shall relieve Lewis from compliance with the
Listings Requirements.
9. JSE categorisation
The Acquisition constitutes a Category 2 transaction in terms of paragraph 9.5(a) of the Listings
Requirements and accordingly no shareholder approval is required.
Cape Town
19 October 2017
Legal advisors to Lewis
ENS Africa
Legal advisors to Vendors
Fluxmans Attorneys
Sponsor to Lewis
UBS South Africa (Proprietary) Limited
2
Date: 19/10/2017 07:05:00 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.
