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Acquisition Of Shareholding In Klein Karoo Saad Bemarking
ZEDER INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 2006/019240/06
Share Code: ZED
ISIN Number: ZAE000088431
("Zeder" or “the Company”)
ACQUISITION OF SHAREHOLDING IN KLEIN KAROO SAAD BEMARKING
(PROPRIETARY) LIMITED
1. THE ACQUISITION
Shareholders are hereby advised that Zeder, through a
nominated subsidiary (“the Acquiror”), has concluded a
transaction which effectively results in the Acquiror
acquiring a minority stake of 49% in the issued share
capital of Klein Karoo Saad Bemarking (Proprietary)
Limited (“Klein Karoo Saad Bemarking”) by way of a
subscription for new shares (“the Transaction”). The
Acquiror has also acquired an option in terms whereof the
Acquiror may in the future, during an agreed option
period, elect to purchase the remaining shareholding in
Klein Karoo Saad Bemarking from the current sole
shareholder, Klein Karoo Saad (Proprietary) Limited
(“Klein Karoo Saad”), with a reciprocal put in favour of
Klein Karoo Saad (“the Option”). In the event that the
Option is not exercised, then the Acquiror will remain a
minority shareholder in Klein Karoo Saad Bemarking.
2. BACKGROUND INFORMATION ON KLEIN KAROO SAAD BEMARKING
AND KLEIN KAROO SAAD
The main business activities of Klein Karoo Saad
Bemarking and its subsidiaries are the handling, value-
adding, processing and marketing of seed and seed-related
products. Klein Karoo Saad is the holding company of
Klein Karoo Saad Bemarking.
3. RATIONALE FOR THE ACQUISITION
The products of Klein Karoo Saad Bemarking complement the
existing product offering of the Acquiror and will allow
the Acquiror to leverage off the existing African and
international networks that have already been established
by Klein Karoo Saad Bemarking.
4. CLASSIFICATION OF THE TRANSACTION
The Transaction on its own does not qualify as a category
2 transaction in terms of the Listings Requirements of
the JSE Limited (“the Listings Requirements”) and this
announcement is therefore a voluntary announcement in
regard to the Transaction. In terms of the Listings
Requirements, it is necessary to aggregate the Option
with the Transaction. Pursuant to such aggregation, the
Option is classified as a Category 2 transaction in terms
of the Listings Requirements.
5. CONDITION PRECEDENT
The Transaction is not subject to the fulfilment of any
condition precedent and payment of the subscription
consideration was made in cash on 3 December 2012.
However, any exercise of the Option is subject to the
fulfilment of the condition precedent that all relevant
competition authorities approve the Option by no later
than 30 June 2013 or such later date as the parties may
agree (“the Condition Precedent”).
6. CONSIDERATION AND WARRANTIES
The consideration payable by the Acquiror to Klein Karoo
Saad Bemarking for the Transaction is the sum of
R80 000 000.92 (eighty million rand and ninety two cents).
In addition, the Acquiror advanced a shareholder loan to
Klein Karoo Saad Bemarking on the implementation of the
Transaction in the sum of R50 470 000 (fifty million four
hundred and seventy thousand rand).
Subject to fulfilment of the Condition Precedent and if
the Option should be exercised, the consideration payable
by the Acquiror to Klein Karoo Saad in respect of the
Option shall be equivalent to an agreed multiple of the
headline earnings of Klein Karoo Saad Bemarking
attributable to ordinary shareholders of the Company,
using the headline earnings as reflected in the annual
audited financial statements of Klein Karoo Saad
Bemarking for the year ended 30 June 2013, or 30 June
2014, as the case may be, subject to a minimum
consideration of R100 000 000 (one hundred million rand)
being payable to Klein Karoo Saad. The Acquiror shall,
in the event that the Option is exercised, be obliged to
acquire the existing shareholder loan claim of Klein
Karoo Saad at the face value thereof which on 3 December
2012 is in the amount of R52 530 000 (fifty two million
five hundred and thirty thousand rand).
Warranties as are normal in transactions of this nature
have been provided to the Acquiror.
7. PRO FORMA FINANCIAL EFFECTS
The pro forma financial effects of the Transaction and
the Option (“the Transactions”) are presented for
illustrative purposes only and because of their nature
may not give a fair reflection of the Company’s financial
position nor of the effect on future earnings after the
implementation of the Transactions.
Set out below are the unaudited pro forma financial
effects of the Transactions, based on the unaudited
financial results for the period ended 31 August 2012.
The directors of the Company are responsible for the
preparation of the unaudited pro forma financial
information.
Unaudited Unaudited Change Unaudited Change
before the Pro Forma (%) Pro Forma (%)
Transactions after the after the
(cents) Transaction Transactions
and before (cents)
the Option
(cents)
Attributable
earnings per share
(1)(3)(4)(7)
(8) 11.0 11.3 2.7% 11.5 4.5%
Headline earnings
per share (1)(3)(4)
(7)(8) 5.9 6.2 5.1% 6.4 8.5%
Recurring headline
earnings per
share(1)(3)(4)(7)(8) 8.5 8.8 3.5% 9.0 5.9%
Net asset value per
share (2)(5) 293.5 293.5 0.0% 293.5 0.0%
Tangible net asset
value per
share (2)(5)(6) 283.3 283.3 0.0% 279.8 (1.2%)
Notes and assumptions:
The unaudited financial information for the six months
ended 31 August 2012 has been extracted from the
published interim results announcement of the Zeder Group.
Rounding of figures may result in computational
discrepancies.
1. The attributable earnings per share and headline
earnings per share figures in the “Unaudited Pro
Forma after the Transaction and before the Option”
and the “Unaudited Pro Forma after the Transactions”
columns have been calculated on the basis that the
Transactions were effected on 1 March 2012.
2. The net asset value per share and tangible net asset
value per share figures in the “Unaudited Pro Forma
after the Transaction and before the Option” and the
“Unaudited Pro Forma after the Transactions” columns
have been calculated on the basis that the
Transactions were effected on 31 August 2012.
3. The taxation rate applicable is assumed to be 28%.
4. The attributable earnings per share, headline
earnings per share and recurring headline earnings
per share figures have been calculated using a
weighted average number of shares in issue of 978 088
517 for the period ended 31 August 2012.
5. The net asset value per share and tangible net asset
value per share calculations have been based on 978
088 517 shares in issue as at 31 August 2012.
6. Intangible assets of R34.7 million were acquired as
part of the Transactions.
7. Cash borrowed by the Zeder Group to invest in Klein
Karoo Saad resulted in a net interest expense for the
group, calculated using the different interest rates
available to the relevant entities.
8. The Zeder Group's share of Klein Karoo's attributable
earnings, headline earnings and recurring headline
earnings for the period 1 March 2012 to 31 August
2012 have been included in the Group results.
8. EFFECTIVE DATE
The effective date of the Transaction is 1 October 2012.
Subject to fulfilment of the Condition Precedent, the
Option may be exercised by the Acquiror within 15
business days following the finalisation of the audited
financial statements of Klein Karoo Saad Bemarking for
the year ended 30 June 2013, or 30 June 2014 should the
parties so decide, or by Klein Karoo Saad in the period
of 30 business days thereafter (“the Option Period”),
with an effective date for the exercise of the Option of
1 June 2013 or 1 June 2014, as the case may be.
9. MEMORANDUM OF INCORPORATION OF KLEIN KAROO SAAD
BEMARKING
Subject to the fulfilment of the Condition Precedent and
if the Option is exercised, Klein Karoo Saad Bemarking
will become a wholly owned subsidiary of the Company. In
such event, the Company shall ensure that the memorandum
of incorporation of Klein Karoo Saad Bemarking is amended
to comply with the requirements of schedule 10 of the
Listings Requirements.
Stellenbosch
4 December 2012
Sponsor: PSG Capital
Date: 04/12/2012 10:54:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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