CASHBUILD LIMITED - Announcement regarding the acquisition of P and L Hardware (Proprietary) Limited

Announcement regarding the acquisition of P and L Hardware (Proprietary) Limited

CASHBUILD LIMITED
(Registration number: 1986/001503/06)
(Incorporated in the Republic of South Africa)
JSE share code: CSB ISIN: ZAE000028320
("Cashbuild" or "the company")

ANNOUNCEMENT REGARDING THE ACQUISITION OF P AND L HARDWARE (PROPRIETARY) LIMITED

1.    Introduction

      Cashbuild shareholders are advised that the Company has entered into an agreement for
      the acquisition of 100% of the shareholding in P and L Hardware (Proprietary) Limited
      (“P&L”) (the “Acquisition”).

      The effective date of the Acquisition will be 5 business days following the date on which all
      conditions precedent have been met, which is anticipated to be by end of November 2015.

2.    Rationale for the Acquisition

      In line with Cashbuild’s strategy for growing the business, the Acquisition will expand
      Cashbuild’s footprint and market share. Through the Acquisition Cashbuild will enhance its
      position in the market as well as aspiration of bringing quality building materials at the
      lowest prices to the communities in which it trades.

3.    Description of P&L

      P&L comprises 39 retail building material and hardware outlets situated predominantly in
      the Limpopo and Mpumalanga provinces of South Africa.

4.    Purchase consideration

      The purchase consideration is the sum of R350,000,000 payable upon fulfilment of
      conditions precedent (set out in paragraph 5 below), plus additional amounts totalling up
      to R80,000,000, if certain profits targets are achieved by P&L during a three year measured
      payment period. The additional amounts will be payable in annual instalments over the
      three years based on achievement against profit targets.

      The purchase consideration will be funded from Cashbuild’s existing cash resources.

5.    Conditions precedent

      The finalisation of the Acquisition is subject to the following conditions precedent:

      -   regulatory approvals, as may be required including the South African Competition
          Authorities;
      -   completion of due diligence investigations; and
      -   concluding management and restraint agreements with key management of P&L, as
          soon as is practically possible.

6.    Value of net assets and profit attributable to the Acquisition

      The value of the net assets that are the subject of the Acquisition is R117,900,000 and the
      profit attributable to the net assets that are the subject of the Acquisition is R35,800,000.
      
7.    Categorisation of the Acquisition

      The Acquisition is categorised as a Category 2 transaction in terms of the JSE Listings
      Requirements and accordingly does not require shareholder approval.


6 August 2015

Sponsor
Nedbank CIB

www.cashbuild.co.za
www.pandl.co.za

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