INSIMBI REFRACTORY & ALLOY SUP LTD - Acquisition by Insimbi of 75% of Polydrum Proprietary Limited and Withdrawal of Cautionary Announcement

Acquisition by Insimbi of 75% of Polydrum Proprietary Limited and Withdrawal of Cautionary Announcement

Insimbi Refractory and Alloy Supplies Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2002/029821/06)
Share code: ISB ISIN: ZAE000116828
(“Insimbi” or “the Company”)

ACQUISITION BY INSIMBI OF 75% OF POLYDRUM PROPRIETARY LIMITED AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

1. Acquisition of Polydrum Proprietary Limited

1.1. Introduction

The board of directors of Insimbi is pleased to announce that it has concluded comprehensive
agreements for the acquisition of Polydrum Proprietary Limited (“Polydrum”) (“the Acquisition”). In
terms of the agreements, Insimbi will acquire 75% of the issued ordinary share capital in Polydrum.

1.2. Description of the Business of the Polydrum

Polydrum is a plastic blow moulding business specialising in the blow moulding of a wide range of
high quality and durable plastic products from plastic drums to swimming pool filters.

1.3. Rationale for the Acquisition

The Acquisition further diversifies Insimbi’s product offering to its existing client base and brings
additional revenue from Polydrum’s existing client base, which is continually expanding as a result of
organic growth.

Polydrum is situated adjacent to the Insimbi campus in Wadeville, Germiston and the adjoining
properties will provide Insimbi with the ability to improve logistic flows of its existing business.

1.5. Classification of the transaction

The Acquisition is classified as a Category 2 transaction in terms of the Listings Requirements of the
JSE Limited.

1.6. Vendors

Shirley-Anne Whittaker, who is selling her total holding being a 50% shareholding of Polydrum and
Colin Whittaker, who is selling an effective 25% shareholding of Polydrum.

Colin Whittaker remains a 12.5% shareholder in Polydrum and continues employment as the
Polydrum Operations Director, post-acquisition. The remaining 12.5% is held by Brian Fetting who is
the current Marketing Director of Polydrum who will continue to act in this portfolio post acquisition.
1.7. Effective date

The effective date of the Acquisition is 1 August 2015.

1.8. Purchase consideration

The aggregate equity purchase consideration payable for the acquisition of Polydrum is R 9 368 820.
Insimbi will settle the obligation immediately using debt funding provided by FNB Corporate Bank. In
addition Insimbi has undertaken to recapitalise Polydrum by introducing a shareholder loan of R 9 381
180 which will be used for working capital and expansion purposes. The total purchase consideration
is therefore R18 750 000.

Colin Whittaker and Brian Fetting will introduce new shareholder loans on a pari-passu basis with
Insimbi. These loans have no fixed terms of repayment and will be repaid as and when the cash flows
of Polydrum allow.

1.9. Conditions Precedent

All conditions precedent relating to the Acquisition have been met.

1.10. Net assets and profits of Polydrum

The intrinsic value of 100% of the net assets that are the subject of the Acquisition as at 30 June 2015
was R 10 122 149 The normalised profit after tax attributable to the net assets that are the subject of
the Acquisition for the 4 month period ending 30 June 2015 is R 1 209 301 based on the management
accounts of Polydrum as at 30 June 2015.

1.11. Memorandum of Incorporation

Insimbi undertakes that the Memorandum of Incorporation of the Acquisition will conform to Schedule
10.21 of the Listings Requirements of the JSE, as required.

2. Withdrawal of cautionary announcement

Following the release of this announcement, the cautionary announcement published by Insimbi on
30 June 2015 is hereby withdrawn and caution is no longer required to be exercised by Insimbi
shareholders when dealing in Insimbi shares.

Johannesburg

09 July 2015

Sponsor: Bridge Capital Advisors (Pty) Limited

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