ART - Argent Industrial Limited - Acquisition ARGENT INDUSTRIAL LIMITED (Registration number 1993/002054/06) Share code: ART ISIN: ZAE000019188 ("Argent" or "the company") ACQUISITION BY ARGENT OF THE ENTIRE ISSUED SHARE CAPITAL OF AND SHAREHOLDER CLAIMS AGAINST PAINT AND LADDERS (PROPRIETARY) LIMITED ("PAINT AND LADDERS") ("THE ACQUISITION") 1. INTRODUCTION The directors of Argent are pleased to announce that Argent has concluded an agreement to acquire the entire issued share capital of and shareholders claims against Paint and Ladders with effect from 1 March 2008, for a total consideration of R57 million, to be settled by way of a cash payment of R16 286 912, and the issue of 2 525 362 Argent ordinary shares at an issue price of R16.17 per ordinary share. 2. NATURE OF BUSINESS OF PAINT AND LADDERS Paint and Ladders is a national company with a presence in both the paint and ladder manufacturing industries. The company consists of two divisions, namely the paint division with products branded as Cedar Vadek and Albestra, and the ladder division where products are branded under the Castor and Ladder brand. Customers include wholesalers and retailers, contractors and construction businesses, as well as industrial companies. There are 9 branches in major centres throughout South Africa, being Bloemfontein, Cape Town, Durban, the East Rand, Johannesburg, Klerksdorp, Port Elizabeth, Pretoria and Richards Bay. The two divisions have a combined turnover of over R200 million, with net margins similar to those of the Argent Group. It is anticipated that the acquisition will add approximately 5.5% to the headline earnings of Argent. 3. RATIONALE FOR THE ACQUISITION The synergies of Argent and Paint and Ladders are numerous, and summarized as follows: - Distribution is a key aspect of the business and Argent`s distribution infrastructure will cut costs in the business; - Both Argent and Paint and Ladders will benefit from leveraging each other`s branches for the presentation and sale of products; - Argents reach into the industrial sector through the trade of steel will promote the sale of more industrial paints; - Xpanda and Jetmaster, who are part of the Argent Group, have well established relationships with wholesalers and retailers and can facilitate the sale of Paint and Ladder products in stores where they currently are not represented; - Castor and Ladder uses around 600 tons of aluminium per annum, which can be supplied largely by Gammid, thus potentially increasing Gammid`s buying power; and - The Paint and Ladder products are well known brands and this adds more credence to the fact that Argents diversification is well on track and will contribute to a re-rating of the Argent share price to reflect this is. 4. TERMS OF THE ACQUISITION The effective date of the transaction is 1 March 2008. The aggregate purchase consideration is R57 million, which will be settled by the allotment of 2 525 362 ordinary Argent shares of 5 cents each, to be issued at 1617 cents per share to the vendors of Paint and Ladder, and a cash portion of R16 286 912. Application will accordingly be made to the JSE Limited, to issue a further 2 525 362 Argent ordinary shares of 5 cents each. 5. SUSPENSIVE CONDITIONS The acquisition was subject to the approval thereof by the Competition Commission, which approval has been granted. 6. DOCUMENTATION The acquisition constitutes approximately 3.39% of Argent`s current issued share capital, and is therefore not categorised by the JSE. Thus this announcement appears for information purposes only. The transaction is at arms length and does not require shareholder approval nor a circular to be sent to shareholders. Roodepoort 11 March 2008 Sponsor ARCAY MOELA SPONSORS (PTY) LIMITED Corporate Advisor MANHATTAN EQUITY CORPORATE FINANCE (PTY) LIMITED Date: 12/03/2008 09:10:55 Supplied by www.sharenet.co.za 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.