The acquisition of the business of East Rand Plastics and withdrawal of cautionary announcement TRANSPACO LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1951/000799/06) Ordinary share code: TPC Ordinary share ISIN: ZAE000007480 (“Transpaco” or “the Company”) THE ACQUISITION OF THE BUSINESS OF EAST RAND PLASTICS AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT 1. Introduction Transpaco has entered into an agreement to acquire the East Rand Plastics division of Astrapak Manufacturing (Pty) Limited ("East Rand Plastics"), a wholly owned subsidiary of Astrapak Limited (“Acquisition”). Astrapak Manufacturing (Pty) Limited will be exiting the business conducted by East Rand Plastics completely. Transpaco will be acquiring the fixed assets, including the associated long-term liabilities, inventory and goodwill as well as the property from which the business of East Rand Plastics currently operates. 2. Overview of East Rand Plastics East Rand Plastics was established in the 1960’s and currently operates as a manufacturer of polyethylene flexible packaging materials predominantly active in the production of refuse bags and bin liners. The business also produces multi-layered industrial film and tubing. The majority of its products are marketed through all major national retail stores in South Africa under its own brand “Garbie” and individual retailer house brands. East Rand Plastics operates out of a 10 000 square metre factory situated in Vulcania Springs. 3. Rationale for the Acquisition East Rand Plastics has achieved consistent growth in sales and profitability since its business was downsized by Astrapak Manufacturing (Pty) Limited subsequent to a fire during 2013, which destroyed the bulk of the factories industrial division. East Rand Plastics satisfies all the criteria in Transpaco’s expansion strategy, namely: - A good track record, being highly profitable and cash generative; - Production processes well known and understood by Transpaco; - An experienced and self-sufficient management team (senior management having on average in excess of 20 years’ experience in operating the business); - Strong growth prospects, arising from its established position in South Africa and opportunities to further expand municipal, industrial, wholesale and export markets; - An opportunity to grow an existing leg to Transpaco operations; and - Expand current product offering to existing Transpaco customers. In addition, the Acquisition has the following attractive features and benefits for Transpaco: - Impressive production facility operating dedicated refuse bag manufacturing machinery with sound standard operating procedures; - Scalable business model which allows for significant growth through production expansion without excessive capex requirements; and - Anticipated earnings enhancement. 4. Purchase consideration The estimated purchase consideration payable for the Business is R 77.5million depending on the final values of the assets to be acquired and liabilities to be assumed which will be determined on the closing date. The purchase consideration for the business includes a premium of R32.5million to the book value of the net assets being acquired in terms of the Transaction. Transpaco will assume an estimated R 13.2 mllion in long-term liabilities associated with the fixed assets being acquired in terms of the Transaction. The purchase consideration payable for the Property is R14,0 million. Transpaco will be financing the Transaction through a combination of existing facilities and cash resources. 5. Net assets acquired and profits attributable to those assets The value of the net assets to be acquired as at 31 January 2015 (being the date of the most recent unaudited management financial statements made available to Transpaco) amounts to R45m. For the six-month period ended 31 January 2015, East Rand Plastics generated turnover of R97,4m and normalised EBITDA of R16,4m. In determining normalised EBITDA Transpaco has excluded expenses which would not reoccur post the closing date. It is anticipated that the Acquisition will be earnings enhancing in the 2016 financial year. The above statement is based on management forecasts, which have not been audited by Transpaco’s auditors and is provided for information only. 6. Conditions precedent The Acquisition is subject to the usual and normal suspensive conditions applicable to a transaction of this nature including Competition Commission approval. 7. Closing date The Closing date of the Acquisition is estimated to be 1 July 2015. 8. JSE categorisation The Acquisition is categorised as a category 2 transaction in terms of section 9.5(a) of the JSE Listings Requirements and accordingly no shareholder approval is required. 9. Withdrawal of cautionary announcement Shareholders are advised that, as a result of the publication of this announcement, the cautionary announcement is now withdrawn and caution is no longer required to be exercised by shareholders when dealing in their shares. Johannesburg 31 March 2015 Legal advisors to Transpaco Edward Nathan Sonnenbergs Incorporated Sponsor to Transpaco Investec Bank Limited Date: 31/03/2015 11:38:00 Produced by the JSE SENS Department. 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