BCK - Blackstar - Disposal of Investment

BCK - Blackstar - Disposal of Investment                                        
Blackstar Group SE                                                              
Previously Blackstar Group PLC                                                  
(Incorporated in England and Wales)                                             
(Company number SE 30)                                                          
(registered as an external company with limited liability in                    
the Republic of South Africa under registration number                          
2011/008274/10                                                                  
Share code: BCK                                                                 
ISIN: GB00B0W3NL87                                                              
("Blackstar" or "the Company")                                                  
Disposal of Investment                                                          
Blackstar is pleased to announce that it has entered into a conditional         
agreement for the sale of 72,989,078 ordinary shares in Litha Healthcare Group  
Limited ("Litha") to Paladin Labs Inc. ("Paladin") (the "Disposal"). The        
Disposal, for a cash consideration of R200,719,964.50 (GBP16.6 million),        
represents 50% of Blackstar`s interest in Litha and equates to R2.75 per Litha  
share.                                                                          
On completion, the Disposal proceeds will represent a 4.58 times return on      
investment in South African Rand and 5.36 times return in Pounds Sterling, which
equates to a 32% IRR and 36% IRR, respectively, over the 5 year holding period. 
The Disposal proceeds will be applied against the Investec Bank Limited debt    
facility that was taken out recently to fund the purchase of shares in          
Mvelaphanda Group Limited, as announced on 18 January 2012.                     
The Disposal forms part of a larger transaction, facilitating Litha`s           
acquisition of 100% of Pharmaplan Proprietary Limited ("Pharmaplan") from       
Paladin for R590 million in cash and shares, as announced on 21 February 2012.  
Pharmaplan is one of the fastest growing specialist pharmaceutical companies in 
South Africa. Following on from the Disposal, and the Pharmaplan acquisition    
(collectively the "Transaction"), Paladin will become a new strategic           
shareholder in Litha owning 44.52% of the ordinary share capital. Following the 
Transaction, Blackstar will retain 73 million shares or 13.4% of the ordinary   
share capital of Litha.                                                         
The acquisition of Pharmaplan gives Litha the appropriate scale in all three    
divisions in which it operates, namely pharmaceuticals, vaccines and medical    
devices. Following the Paladin acquisition, the Litha Pharma Division is        
expected to become Litha`s most profitable division by earnings, as such the    
group`s profitability is expected to be positively impacted.                    
Blackstar is a founding shareholder in Litha (formerly Myriad Medical) having   
invested in the business prior to its IPO in October 2006. Blackstar has been   
actively involved in Litha and the development of the business, as well as      
leading many of Litha`s successful acquisitions. On this occasion, Blackstar    
will earn a R5 million (GBP0.4 million) corporate finance fee, payable in cash, 
for its role as originator and underwriter of the Transaction.                  
The sale agreement is subject to the fulfillment of certain suspensive          
conditions, which are standard in a transaction of this nature, including the   
approval of the South African Competition Authorities.  Blackstar`s remaining   
shares will be subject to a 6 month lock up, with Paladin having a pre-emptive  
right over these shares. The transaction is expected to be completed in the     
second half of 2012.                                                            
Andrew Bonamour, director of Blackstar and Chairman of Litha, commented:        
"Litha has been a very successful investment for Blackstar and the Blackstar    
board is pleased that it has been able to generate these returns on investment  
for shareholders. The Pharmaplan acquisition provides the appropriate scale to  
the Litha group as a whole and should positively impact the group`s             
profitability. It will solidify the Litha business model in South Africa and    
will assist with the long term strategy to expand its African footprint in the  
sub-Saharan African healthcare market."                                         
21 February 2012                                                                
London                                                                          
For further information, please contact:                                        
Blackstar Group SE   John Kleynhans       +352 402 505 427                      
Liberum Capital      Chris Bowman /       +44 (0) 20 3100 2222                  
Limited              Christopher Britton                                        
PSG Capital (Pty)    David Tosi           +27 (0) 21 887 9602                   
Limited                                                                         
Date: 21/02/2012 15:30:01 Supplied by www.sharenet.co.za                     
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