ARGENT INDUSTRIAL LIMITED - Acquisition of Fuel Proof Limited and Roll-Tec Safety Limited

Acquisition of Fuel Proof Limited and Roll-Tec Safety Limited

Argent Industrial Limited
(Registration number 1993/002054/06)
(Incorporated in the Republic of South Africa)
Share Code: ART
ISIN: ZAE000019188
(“Argent” or “the Company”)

ACQUISITION OF ENTIRE SHARE CAPITAL OF FUEL PROOF LIMITED AND
ROLL-TEC SAFETY LIMITED

1. Introduction and rationale

Argent is pleased to announce that it has entered into a Heads
of Agreement to acquire the entire share capital of Fuel Proof
Limited and Roll-Tec Safety Limited from R.A. Pilkington and
A.R. Hargreaves (collectively, the “sellers”) for a cash
purchase consideration of GBP 4 600 000(“the transaction”).

The rationale for the transaction is an opportunity to grow its
business by further diversifying its portfolio of companies and
to expand internationally into the United Kingdom.

2. The nature of business

Fuel Proof Limited has an excellent reputation as leaders in
the field of fuel storage and supply systems that are designed
to provide improved security, service life, reliability and
ease of use. Roll-Tec Safety Limited is a specialist
manufacturer of roll-over protection bars for construction
machinery as well as being the rental agent for Fuel Proof
Limited, renting out its products into the European market.

3.   The consideration

The purchase consideration is GBP 4 600 000 to be settled in
cash upon entering into a binding sale and purchase agreement
on completion of a satisfactory financial and legal due
diligence by the company.

The purchase consideration will be recalculated twenty-four
months after the effective date in that it will either reduce
to a minimum of GBP 4 080 000 or increase to a maximum of
GBP 6 million.

The purchase consideration spread will be based on the average
yearly after taxable income ranging from a minimum of
GBP 680 000 to a maximum of GBP 1 million.

4. Conditions precedent

The transaction is subject to the fulfilment of the following
conditions precedent:

4.1 The company, at its sole discretion, will confirm that its
    satisfied with the outcome of the financial and legal due
    diligence to be completed by mid-May 2018;
4.2 The annual maintainable income after annual tax must not
    be less than GBP 680 000;
4.3 The sellers provide warranties regarding the legal and tax
    matters as well as warranting the assets, liabilities and
    product warranties; and
4.4 Other conditions that are customary for a transaction of
    this nature.

5. Effective date

The effective date of the transaction is the commencement of
business on the first day of the month succeeding the month in
which the conditions are fulfilled.

6.    Financial Information

6.1 The net value of the assets attributable to the business
    amounts to GBP 2.2 million.

6.2 The profits attributable to the business amounts to
    GBP 680 000 after taxation.

6.3 The financial information contained in this announcement
    has not been reviewed or reported on by Argent’s auditors.

7.    Categorisation

7.1   As the transaction amounts to more than 5% but less than
      30% of the market capitalisation, the transaction is
      classified as a category 2 transaction in terms of
      paragraph 9.5 of the JSE Listings Requirements.

7.2   This announcement is made for information purposes only and
      no action is required by Argent shareholders with regards
      to the transaction.

7.3   The Company will advise shareholders once all the
      conditions precedent to the transaction have been
      fulfilled.

Umhlanga
20 February 2018

Sponsor: PSG Capital Proprietary Limited

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