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Acquisition of Allen Ford (UK) Limited and Strategic Properties
Super Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1943/016107/06)
Share code: SPG
ISIN: ZAE000161832
(“Super Group”)
ACQUISITION OF ALLEN FORD (UK) LIMITED AND STRATEGIC PROPERTIES
1. Introduction and overview of the Acquisition
1.1. Super Group has concluded an agreement with:
- David Hammond, Paul Dunkley and Sir Geoffrey Whalen to
acquire 100% of the shares of CHA (2005) Limited. CHA (2005)
Limited, holds 100% of the shares in Charles H. Allen Limited
(“CHA”), which in turn holds 78,28% of the shares of Allen
Ford (UK) Limited “Allen Ford”); and
- Derek Brook, Michael Philips, Ronald Joseph, Paula Wood,
Andrew Axon and Michael Ball (collectively “The Management”
of Allen Ford) for the remaining 21,72% of the shares of
Allen Ford not owned by CHA (“the Allen Ford Acquisition”).
The purchaser is Super Group (UK Investments) Limited, a wholly
owned subsidiary of Bluefin Investments Limited, a Super Group
Company. Both Super Group (UK Investments) Limited and Bluefin
Investments Limited are registered in Mauritius.
1.2. Super Group has concluded an agreement with Camden Ventures
Limited and Camden Motors (Holding) Limited (“Camden Companies”)
giving Super Group a call option to purchase eight strategic
freehold or leasehold properties leased by Allen Ford from the
Camden Companies (“the Properties Acquisition”).
Should Super Group exercise the call option on any of the
properties, the purchaser will be one of Super Group (UK
Investments) Limited, Allen Ford or a Super Group subsidiary
company to be formed in the UK.
The Allen Ford Acquisition and the Properties Acquisition
constitutes the Transaction.
2. Nature of business
Allen Ford is a franchised motor dealer group that has over 100 years
of history within the UK motor industry. Allen Ford has won numerous
awards in recent years, and is the second largest independently owned
Ford franchise network in the UK.
The business currently operates thirteen franchised Ford motor
dealerships and two franchised Kia motor dealerships in four of the key
Ford franchise areas in England. The Counties are Coventry, which
includes Ford dealerships in Coventry, Rugby, Nuneaton and Warwick and
a Kia dealership in Solihull. The Northampton County consists of three
Ford dealerships in Riverside (Fortune Close, Long Itchington and
Bedford Road, with the latter being a Commercial vehicle dealer),
Daventry and Kettering. The Essex County has three Ford dealerships in
Romford, Upminster and Brentwood. The fourth county, Swindon, has Ford
dealerships in Swindon and Bath, as well as a Kia dealership in Bath.
The Management will be remaining with Allen Ford post the Allen Ford
Acquisition.
3. Consideration
Note: the exchange rate used in this document is GBP1 = ZAR17,8760.
3.1. The purchase price for the Allen Ford Acquisition is GBP33,9
million (ZAR606,0 million), of which GBP23,8 million (ZAR425,4
million) will be financed by a Mauritian based financial
institution. Super Group will settle the balance of GBP10,1
million (ZAR180,5 million) plus costs of the Allen Ford
Acquisition from cash resources.
3.2. The purchase price of the Properties Acquisition, assuming that
the sale option is exercised in respect of all eight of the
properties, is GBP18,4 million (ZAR328,9 million), of which
between 60% and 70% will be financed by a UK based financial
institution. Super Group will settle the balance plus costs of the
Properties Acquisition from cash resources.
4. Net assets acquired and profits attributable to those assets
4.1. The net asset value of the Allen Ford Acquisition will be
approximately GBP9,5 million (ZAR169,8 million). The profit after
taxation associated with these assets is GBP5,4 million (ZAR96,5
million).
4.2. The value of the Properties Acquisition as determined by a
professional valuer in September 2014 is GBP19,8 (ZAR353,9
million). The profit after taxation associated with the properties
is GBP0,15 million (ZAR2,7 million).
5. Rationale for the Transaction
Super Group’s strategy over the past five years has been to make
selective acquisitions in its core businesses namely Supply Chain,
Fleet Management and Dealerships in South Africa and internationally.
The acquisition of Allen Ford is in line with this strategy and
represents an opportunity for the Group to build a dealership business
in the third largest car market in the world.
The Group has had a policy of owning dealership properties in strategic
locations in South Africa. The purchase of the properties in the UK is
in line with this policy.
6. Conditions precedent
The Transaction remains subject to the following conditions precedent:
1. Approval by the South African Reserve Bank of the Transaction.
2. Approval by the Financial Control Authority in the UK of the
Transaction.
7. Effective date
The effective date of the Allen Ford Acquisition is subject to the
conditions precedent being met and is expected to be around 1 December
2014. The Properties Acquisition is expected to be completed shortly
thereafter.
8. JSE Limited (“JSE”) Listings Requirements
Subsequent to the acquisition of CHA (2005) Limited and Allen Ford, the
certificates of incorporation and articles of association of these
companies will be reviewed to ensure that they do not prevent Super
Group from complying with its obligations in terms of the JSE Listings
Requirements.
9. JSE categorization
The Transaction is a category 2 transaction in terms of paragraph
9.5(a) of the JSE Listings Requirements.
Sandton
10 October 2014
Sponsor: Deutsche Securities (SA) Proprietary Limited
Date: 10/10/2014 02:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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