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Proposed acquisition of 75% of IN tIME Holding GmbH and proposed rights offer of up to R900 million
Super Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1943/016107/06)
Share code: SPG
ISIN: ZAE000161832
(“Super Group”)
PROPOSED ACQUISITION OF 75% OF IN TIME HOLDING GMBH AND PROPOSED RIGHTS
OFFER OF UP TO R900 MILLION
1. INTRODUCTION
The board of directors of Super Group (the “Board”) is pleased to announce it has concluded
an agreement with certain funds managed by Equistone Partners Europe Limited
(“Equistone”) to acquire a 75% interest in the share capital of Telo Zwei
Vermögensverwaltung GmbH (“Telo Zwei”), the holding company owning 100% of IN tIME
Holding GmbH and the IN tIME group of companies (“IN tIME”) (the “Proposed Acquisition”).
The investment in IN tIME will be held via Bluefin Investments Limited, a wholly owned
subsidiary of Super Group, which is registered in Mauritius.
The remaining 25% interest in the shares of Telo Zwei is held by the management team of IN
tIME (“Management”). Management is retaining its 25% interest in IN tIME, alongside Super
Group’s proposed 75% interest.
The total purchase consideration for 100% of IN tIME is approximately €153.5 million (R2.1
billion), representing an 8.7 times EBITDA multiple based on the actual profit of IN tIME for
the year ended 31 December 2014. The effective return on equity (including shareholder
loans) is 11.9% and a historic price earnings multiple of 8.4 times.
Unless otherwise noted, all € figures have been converted at the R/€ exchange rate of 14.00.
2. OVERVIEW AND PRINCIPAL TERMS OF THE PROPOSED ACQUISITION
2.1. IN tIME overview
IN tIME operates in the niche logistics sector of time-critical delivery services, servicing
the automotive, electronics, hazardous goods, life sciences, pharmaceutical, temperature
controlled, emergency blood and medical service industries. Time-critical delivery
services are emergency shipments utilised to prevent supply chain interruptions that
require short-notice collection (60 to 90 minutes from order receipt) and specialised
handling of shipments to the final destination. Typically consignments are between 70kg
and 5 tons.
IN tIME is headquartered in Germany with 20 operating branches across Germany,
Sweden, Hungary, Romania, the Czech Republic and Poland, and operates across a
further 13 countries in Europe. IN tIME reported revenue of €139 million (approximately
R1.9 billion) for the financial year ended 31 December 2014, which was generated in the
following geographies:
* Germany (~83%);
* Central and Eastern Europe (~11%); and
* Western Europe (~6%)
IN tIME’s web address is www.intime.de.
IN tIME’s business model has differentiated it from competitors in terms of quality and
efficiency and positioned it for growth via expansion into Europe as well as consolidation
of a fragmented sector. Key aspects of IN tIME’s business model include:
* Information Technology: IN tIME has developed proprietary dispatching software
which optimises transport capacity utilisation. This allows IN tIME to realise scale
effects from maximising vehicle load ratios;
* Floating hubs: IN tIME does not operate a traditional ‘hub and spoke’ model.
Rather it tends to operate point-to-point services and utilises ‘floating’ hubs;
* Asset-light model: IN tIME services clients via more than 2,500 registered co-
operation partners, i.e sub-contractors, and owns a very limited number of
vehicles.
IN tIME’s major customers include leading automotive original equipment manufacturers
and suppliers such as Bosch, Continental, Audi, BMW, Daimler, Ford, MAN, Porsche and
Volkswagen. Other customers include 3M, Bundeswehr, Eaton, Johnson Controls, Lear,
Osram, Saint-Gobain and Voith, as well as many large integrated logistics groups such as
DHL, TNT and UPS. It has an active customer base of more than 6,600 customers.
IN tIME’s management team is led by Torsten Prelle, who is the chief executive officer of
IN tIME and Managing Director of operations and subcontractors, together with Gerd
Röttger, who is Managing Director of Sales & Personnel. Torsten has been the chief
executive officer of IN tIME since 2001, when he joined the company. Gerd has been in
his role since 2007, and has worked at IN tIME since 2001.
2.2. Rationale for the Proposed Acquisition
Super Group’s strategy over the past five years has been to make selective and niche
acquisitions in its core businesses, namely Supply Chain, Fleet Management and
Dealerships, in South Africa and internationally.
Supply Chain management is a core focus of Super Group’s strategic direction. Within
the Supply Chain operations, automotive and other time critical delivery and warehouse
distribution services are important aspects of Super Group’s market competencies. Super
Group also has significant capabilities within the automotive industry via its other primary
businesses, namely, Fleet Management and Dealerships. Accordingly, Super Group
identifies strongly with IN tIME’s business model and core customer base.
Super Group’s geographic expansion has resulted in its growth into Australia and, more
recently, the United Kingdom. This strategy has been executed over a number of years.
The decision to establish a presence in Germany represents a further continuation of
Super Group’s strategy.
2.3. Proposed transaction funding
The total purchase consideration payable for 100% of IN tIME will be funded as follows:
* €79.2 million (approximately R1.1 billion) cash contribution by Super Group
comprising of:
– €48.9 million (approximately R685 million) for its 75% equity interest; and
– a €30.3 million (approximately R424 million) shareholder loan;
* €16.3 million (approximately R228 million) equity contribution by Management for
their 25% equity interest (via contribution of their shares in Telo Zwei); and
* €58.0 million (approximately R812 million) of German debt facilities (term loans)
provided by three European banks (the “Debt Funders”). Super Group has
entered into binding facility agreements with the Debt Funders.
The funding of Super Group’s investment in IN tIME will be via:
* existing cash and borrowing facilities within Super Group; and
* a fully underwritten renounceable rights offer of up to €64.3 million (approximately
R900 million) (the “Proposed Rights Offer”). See section 3 below for further detail.
2.4. Conditions precedent to the Proposed Acquisition
The Proposed Acquisition is conditional upon the fulfilment or waiver of the following
conditions precedent:
* approval by the financial surveillance department of the South African Reserve
Bank; and
* the successful completion of the Proposed Rights Offer. See section 3.2 below
for further detail.
2.5. Financial effects of the Proposed Acquisition
The tangible net asset value of IN tIME as at 31 December 2014 was €14.2 million (R196
million). The normalised profit after taxation attributable to these net tangible assets for
the year ended 31 December 2014 was €11.9 million (R167 million).
3. PROPOSED RIGHTS OFFER
3.1. Overview
Super Group intends to implement the Proposed Rights Offer post the release of its 2015
financial year end results on or about 24 August 2015, at which time the detailed terms of
the Proposed Rights Offer will be released on the Stock Exchange News Service of the
JSE Limited (“SENS”). Super Group has entered into an underwriting agreement with
Investec Bank Limited in respect of the Proposed Rights Offer, whereby the Proposed
Rights Offer is fully underwritten up to a value of R1.1 billion, however Super Group
anticipates the Proposed Rights Offer will be approximately R900 million (approximately
€64.3 million).
3.2. Conditions precedent to the Proposed Rights Offer
The implementation of the Proposed Rights Offer is subject to the fulfilment of the
following conditions:
* Approval by Super Group shareholders of any resolutions that may be required in
connection with the implementation of the Proposed Rights Offer;
* Approval being obtained from the JSE Limited (“JSE”) for distribution of the
Proposed Rights Offer circular; and
* Approval being obtained from the JSE for the listing of the letters of allocation
and the listing of the Proposed Rights Offer shares.
4. EFFECTIVE DATE
Subject to the conditions precedent being met, the effective date of the Proposed Acquisition
will be 31 October 2015.
5. JSE LIMITED LISTINGS REQUIREMENTS
Subsequent to the Proposed Acquisition, the Articles of Association of the associated
companies will be reviewed to ensure that they do not prevent Super Group from complying
with its obligations in terms of Schedule 10.21 of the JSE Listings Requirements.
6. JSE LIMITED CATEGORISATION
The Proposed Acquisition is classified as a category 2 transaction in terms of paragraph
9.5(a) of the JSE Listings Requirements.
7. TIMETABLE
Further announcements and a detailed timetable for the Proposed Rights Offer, including the
final terms of the Proposed Rights Offer, will be released on SENS and published in the South
African press in due course.
Sandton
13 July 2015
Financial Advisor
Macquarie First South Capital Proprietary Limited
JSE Sponsor
Deutsche Securities (SA) Proprietary Limited
Underwriter and advisor to the Rights Offer
Investec Bank Limited
South African Legal Counsel to Super Group
Fluxmans Inc.
International Legal Counsel to Super Group
White & Case LLP
Date: 13/07/2015 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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