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Transpaco Limited - Acquisition and further cautionary announcement

Release Date: 10/03/2005 15:50
Code(s): TPC
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Transpaco Limited - Acquisition and further cautionary announcement TRANSPACO LIMITED (Incorporated in the Republic of South Africa) (Registration number 1951/000799/06) Share code : TPC ISIN : ZAE00007480 ("Transpaco") ACQUISITION AND FURTHER CAUTIONARY ANNOUNCEMENT 1. Introduction Further to the cautionary announcement dated 15 February 2005, Investec Bank Limited is authorised to announce that Transpaco Limited has successfully concluded its negotiations for the acquisition of Britepak Trading (Pty) Ltd ("Britepak") with effect from 1 March 2005 subject to the condition specified below. 2. Nature of business of Britepak and rationale for acquisition Britepak was founded in 1974 and supplies printed folded cartons, instruction leaflets, cut labels and general print for use in the pharmaceutical, healthcare, cosmetic, hair care and related industries. Transpaco currently derives a major portion of its income from plastic based materials. The diversification into high quality printed cartons enables Transpaco to participate in another packaging industry not dependant on plastic raw material. Britepak was identified due to its exceptional quality, customer profile and value added niche market. Salient terms of the acquisition Transpaco will purchase 100% of the shares in Britepak from The Dudley Leon Almarie & Audrey Trust, The Dada Family Trust, G Dada, F Davies, J Latter and D McLaughlin ("The Vendors") for R18.5 million payable on the closing date. The consideration will be paid out of Transpaco"s resources. The sellers have given Transpaco the usual warranties for a transaction of this nature and appropriate restraints of trade. G Dada and D McLaughlin are retiring. F Davis and J Latter have entered into 3 and 5 year service contracts respectively. Thus continuity of management is assured. No retrenchments are contemplated. Conditions precedent The acquisition is conditional on a successful conclusion of a due diligence investigation by Transpaco into Britepak. 5. Effective Date The effective date of the acquisition is 1 March 2005 with the closing date being the first business day of the month following the month during which the condition will have been fulfilled or waived. 6. Financial effects of the acquisition Based on the reviewed results of Transpaco and unaudited results of Britepak for the 6 months ended 31 December 2004, the acquisition would not have had a significant effect on the headline earnings per Transpaco share, assuming that the acquisition had been in effect for the 6 months ended 31 December 2004. The acquisition is expected to make a positive contribution to the future earnings of Transpaco. Had the Britepak acquisition taken place at 31 December 2004 based on the net tangible asset value of Britepak reflected in the accounting records at that date, the pro-forma net asset value per Transpaco share would have decreased from 392 cents to 376 cents, a change of 4.1% 7. Categorisation of the acquisition The acquisition is a category 3 transaction in terms of section 9.5(a) of the listing requirements of the JSE Securities Exchange South Africa. Other proposals including a black economic empowerment The discussions dealing with various proposals in relation to Transpaco"s affairs including black economic empowerment continue. Further cautionary announcement Transpaco shareholders are advised to continue to exercise caution when dealing in Transpaco shares pending further announcements in regard to the matters referred to above. Johannesburg 10 March 2005 Sponsor Legal Advisor Investec Bank Limited Werksmans Incorporated (Registration number 1990/005857/21) Date: 10/03/2005 03:50:18 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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