RHODES FOOD GROUP HOLDINGS LIMITED - Voluntary announcement: Acquisition of the business assets of Alibaba Foods Holdings Proprietary Limited ("Alibaba")

Voluntary announcement: Acquisition of the business assets of Alibaba Foods Holdings Proprietary Limited ("Alibaba")

RHODES FOOD GROUP HOLDINGS LIMITED
(Previously Rhodes Food Group Holdings Proprietary Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2012/074392/06)
JSE share code: RFG
ISIN: ZAE000191979
("RFG" or "the Company" or "the group")


VOLUNTARY ANNOUNCEMENT: ACQUISITION OF THE BUSINESS ASSETS OF ALIBABA FOODS HOLDINGS PROPRIETARY LIMITED
 ("ALIBABA")

Introduction and overview
Shareholders are advised that the Company's wholly owned subsidiary, Rhodes Food Group Proprietary
Limited ("Rhodes Food") and Alibaba have entered into an agreement ("Agreement") dated
30 October 2015 in terms of which Rhodes Food will acquire the business assets of Alibaba ("the
Acquisition").

Description of the business carried on by Alibaba
Alibaba, based in Athlone, Cape Town, manufactures a range of halaal Eastern food products. Its product
range includes samoosas, pies and rooties. These products are sold to all major South African food
retailers, forecourt bakery outlets and independent traders.

Rationale for the Acquisition
The board of RFG is of the opinion that the Acquisition presents an attractive investment opportunity
which is aligned with RFG's strategy of expanding its business operations through value accretive
acquisitions. This Acquisition will further strengthen Rhodes Food’s position in the bakery and snacking
category, particularly in the convenience channel. Alibaba will complement the group’s existing pies and
pastries business, and its newly acquired confectionery business from General Mills South Africa.

Purchase consideration and effective date
The purchase consideration payable by Rhodes Food to Alibaba is R42 000 000 (forty two million rand).
The effective date of the Acquisition is 1 February 2016.

Conditions precedent
The implementation of the Acquisition is subject to the following conditions precedent:
   (a) that those employees of Alibaba who have elected to remain employed with Alibaba and who will
       therefore not be transferring to Rhodes Food, sign a waiver as contemplated in section 197(6) of
       the Labour Relations Act (66 of 1995), and that Alibaba provides Rhodes Food with a copy of
       such signed waivers on or before 31 January 2016;
   (b) that a comprehensive due diligence investigation is completed by Rhodes Food on or before
       4 December 2015 and Rhodes Food is satisfied with the result of such investigation in its sole
       and absolute discretion (“Due Diligence Condition”);
   (c) that the board of directors of RFG approves the Acquisition subsequent to the fulfilment of the
       Due Diligence Condition and Rhodes Food provides a copy of such approval to Alibaba on or
       before 31 January 2016; and
   (d) that Alibaba furnishes Rhodes Food with a copy of a special resolution passed by the
       shareholders of Alibaba approving the Acquisition, as required in terms of section 112 (read with
       section 115) of the Companies Act (71 of 2008) on or before 31 January 2016.

Revenue attributable to the business of Alibaba
Alibaba’s net asset value at the end of its last financial year (28 February 2015) was R10.990 million.
EBITDA for the financial year ended 28 February 2015 amounted to R6.172 million on revenue of
R48.206 million.

Classification of the transaction
The Acquisition does not constitute a categorised transaction in terms of the JSE Listings Requirements
and this announcement is therefore made on a voluntary basis.


Groot Drakenstein
2 November 2015

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

Legal Advisor
Edward Nathan Sonnenbergs Incorporated

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