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Proposed sale of Bioharmony and Menoclove brands and stock
BIOSCIENCE BRANDS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2005/005805/06)
(JSE code: BIO ISIN: ZAE000115036)
(“BioScience” or “the Company”)
Proposed sale of Bioharmony and Menoclove brands and stock
1. Background and reason for disposal
Shareholders have been advised on an ongoing basis of the restructuring of BioScience. Initially, the
restructuring focussed on cutting costs and addressing legacy liabilities. Now, following several
successful initiatives to address Company liabilities, the board of directors are in a position to
consider the strategic direction of the business. In this regard certain brands are no longer regarded
as core to the company’s offering and BioScience and its wholly owned subsidiary, Bioharmony (Pty)
Ltd (“Bioharmony”) entered into heads of agreement with a non-related third party, Avid Brands S.A.
(Pty) Ltd (“the Purchaser”) on 11 December 2012 for the disposal of such brands and related stock.
2. Heads of Agreement (“Heads”)
In terms of the Heads Bioharmony is prepared to sell to the Purchaser the following:
- the Bioharmony and Menoclove brands (“the Brands”) for R12 million excluding VAT, payable
on the effective date; and
- the Bioharmony and Menoclove stock (“the Stock”) for a maximum price of not more than R2
million excluding VAT.
The Brands will include all intellectual property such as trademarks, related trademarks, dossiers,
registrations, formulae and know-how.
The Stock will be acquired at cost, to be determined upon receipt based on the quantities received
and the actual unit costs. The Stock must be in good and saleable condition. Any damaged or short
dated stock will be excluded. Bioharmony will deliver the Stock to the Purchaser’s warehouse in
Gauteng. Payment for the Stock will be made by the Purchaser in two equal instalments 30 and 60
days after receipt.
All other assets, liabilities and contractual commitments relating to Bioharmony, BioScience, the
Brands or the Stock are excluded, as well as all employees associated with the Brands.
3. Suspensive conditions
The proposed sale will be subject to the following suspensive conditions:
(a) the entering into of a sale agreement by not later than 31 January 2013;
(b) the unconditional release of all securities over the Brands, so that they will be acquired free from
all securities;
(c) the restructuring of the management agreement with Akacia Healthcare Limited in respect of the
Brands;
(d) the sale will be advertised in terms of section 34 of the Insolvency Act;
(e) BioScience will obtain all the necessary approvals from its shareholders and the JSE Limited
(“JSE”) to the extent required by the JSE and the Companies Act, 2008.
The targeted effective date is 1 February 2013, by which date the parties anticipate that all
suspensive conditions will have been fulfilled.
4. Unaudited pro forma financial effects of the proposed disposal
The unaudited pro forma financial effects set out below are provided for illustrative purposes
only to provide information about how the disposal may have impacted on BioScience’s results
and financial position. The pro forma financial effects have been prepared in accordance with
International Financial Reporting Standards. Due to the nature of the unaudited pro forma
financial information, it may not give a fair presentation of the Company’s results and financial
position after the disposal. The unaudited pro forma financial effects are based on the unaudited
financial information of the Company for the 6 month period ended 30 June 2012. The directors
of the Company are responsible for the preparation of the unaudited pro forma financial effects.
Before the Pro forma After the
disposal disposal
Audited Unaudited
30 June 2012 30 June 2012 Change
Earnings per share (cents) (0.23) (0.74) (222%)
Headline earnings per share (cents) (0.24) (0.27) (13%)
Net asset value per share (cents) 0.51 0.00 (100%)
Net tangible asset value per share (cents) (0.85) (0.40) 53%
Weighted average shares in issue 2 719 510 467 2 719 510 467 0%
Number of shares in issue at period end 2 621 362 758 2 621 362 758 0%
Notes:
(1) For the purpose of calculating the pro forma earnings and headline earnings per share, it is
assumed that the disposal was implemented on 1 July 2011 and for the purpose of calculating
the pro forma net asset value and the net tangible asset value per share, it is assumed that the
disposal was implemented on 30 June 2012.
(2) The "Before the disposal" column has been extracted without adjustment, from the audited
annual results of BioScience for the period ended 30 June 2012
(3) The "After the disposal" earnings per share excludes the revenue and costs actually earned and
incurred during the period related to Bioharmony and Menoclove, and to reflect the loss on the
disposal of Bioharmony and Menoclove of R13,3 million, and the tax effects thereof. This loss
has been excluded in the calculation of headline earnings per share. Transaction costs were not
accounted for as they are immaterial.
(4) The "After the disposal" net asset value and net tangible asset value per share have been
adjusted to show the effects of the disposal of the intangible asset and stock at book value for
cash, and the loss on disposal of Bioharmony and Menoclove of R13,3 million.
The directors of the Company wish to point out that the pro forma financial effects do not take into
account the recent brand relaunch nor the launch of the new Muscle Science products.
5. Categorisation of the disposal
The disposal is categorised, in terms of the JSE Limited’s Listings Requirements, as a Category
2 transaction and does not require shareholders’ approval. The Purchaser is not related to
BioScience or Bioharmony as defined in the JSE’s Listings Requirements.
6. Further announcement
A further announcement will be made once the agreement has been signed and all the
suspensive conditions have been fulfilled.
Johannesburg
11 December 2012
Designated Adviser
Exchange Sponsors
Date: 11/12/2012 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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