BRAIT SE - Braits proposed acquisition of a c.80% interest in Virgin Active and withdrawal of cautionary announcement

Brait’s proposed acquisition of a c.80% interest in Virgin Active and withdrawal of cautionary announcement

Brait SE
(Registered in Malta as a European Company)
(Registration No.SE1)
Share code: BAT ISIN: LU0011857645
Share Code: BATP ISIN: MT0000680208
(“Brait” or “the Company”)

BRAIT’S PROPOSED ACQUISITION OF A c.80% INTEREST IN VIRGIN ACTIVE AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

1. Introduction
   
   Further to the cautionary announcement released on the website of
   the Luxembourg Stock Exchange (“LuxSE”) and on the Stock Exchange
   News Service (“SENS”) of the Johannesburg Stock Exchange (“JSE”)
   on 2 April 2015, shareholders in Brait (“Shareholders”) are
   advised that Brait’s wholly owned subsidiary, Brait Mauritius
   Limited, has entered into a conditional agreement, primarily with
   Darwin Holdings S.a.r.l, a wholly owned subsidiary of certain
   funds (“CVC Funds”) managed and advised by subsidiaries of CVC
   Capital Partners SICAV-FIS S.A. and Virgin Group Holdings Limited
   (“Virgin Group”), to acquire a c.80% interest in the
   international health club operator Active Topco (“Virgin Active”)
   (“the Acquisition”) for c.GBP682 million (before adjustment as
   detailed in section 4 below).

2. Overview of Virgin Active
   
   Virgin Active was founded in the United Kingdom in 1999 and is
   one of the world's leading international health club operators
   with 267 clubs in 9 countries across 4 continents at 31 December
   2014. Virgin Active has a leading position in South Africa and
   the United Kingdom, as well as attractive positions in Italy,
   Spain and Portugal. Virgin Active also has a presence in
   Thailand, Singapore and Australia providing opportunities within
   the fast growing Asia Pacific health club market. Virgin Active
   has over 1.3 million members worldwide and generated c.GBP630
   million in revenue for the year ending 31 December 2014.

3. Rationale for the Acquisition
   
   Virgin Active is a high-quality, consumer facing growth asset,
   with a combination of emerging and developed market exposure.
   Virgin Active is attractive to Brait for the following reasons:

   -   Excellent financial track record. Virgin Active has
       demonstrated double digit CAGR in revenue and EBITDA over the
       past 10 years;
   -   Strong cash flow generation;
   -   High degree of earnings visibility;
   -   Aspirational global consumer brand;
   -   Health club offering positioned for positive macro health and
       wellness trends;
   -   An experienced, aligned and proven management team;
   -   Geographical diversification of operations and earnings;
   -   Platform for future growth, particularly in Africa and Asia.

4. Summary of the key terms of the Acquisition
  
   Brait will acquire a c.80% interest in Virgin Active, primarily
   from CVC Funds and the Virgin Group. The Virgin Group will
   continue to hold a c.20% interest. The existing management team
   will be retained and will be reinvesting alongside Brait and the
   Virgin Group.

   The Acquisition is at an enterprise value of c.GBP1.3 billion and
   an equity value of c.GBP870 million for the entire issued share
   capital as at 31 December 2014. The consideration payable by
   Brait of c.GBP682 million for a c.80% interest will increase at a
   rate of 5% per annum from 31 December 2014 (“the Effective Date”)
   to closing and be reduced by certain pre-Acquisition expenses
   (“Purchase Consideration”).

   Brait will fund the Purchase Consideration using cash on hand.

5. Conditions precedent
  
   The implementation of the Acquisition is subject to the approval
   by the South African and Namibian competition authorities.

6. Withdrawal of cautionary announcement
  
   Shareholders are advised that, as a result of the publication of
   this announcement, the cautionary announcement of 2 April 2015 is
   hereby withdrawn and that caution is no longer required to be
   exercised by Shareholders when dealing in their Brait shares.


Malta
16 April 2015

The Company’s primary listing is on the Euro MTF market of the
LuxSE and secondary listing on the JSE.

Joint investment banks to Brait
Rand Merchant Bank (A division of FirstRand Bank Limited):
Leveraged Finance
The Standard Bank of South Africa: Corporate Finance


United Kingdom attorneys
Linklaters LLP


South African attorneys
DLA Cliffe Dekker Hofmeyr
European legal advisor
M Partners S.à r.l. (A member of Maitland Legal)


Sponsor to Brait
Rand Merchant Bank (A division of FirstRand Bank Limited)

Date: 16/04/2015 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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