DENEB INVESTMENTS LIMITED - Acquisition Of The Entire Issued Share Capital Of Premier Rainwatergoods Proprietary Limited

Acquisition Of The Entire Issued Share Capital Of Premier Rainwatergoods Proprietary Limited

Deneb Investments Limited
(Incorporated in the Republic of South Africa)
Registration number 2013/091290/06
Share code: DNB
ISIN: ZAE000197398
("Deneb" or “the Company”)

CATEGORY 2 TRANSACTION: ACQUISITION OF THE ENTIRE ISSUED SHARE
CAPITAL OF PREMIER RAINWATERGOODS PROPRIETARY LIMITED (“Premier”)

1.   THE TRANSACTION

     Shareholders are hereby advised that the Company has entered
     into an agreement dated 8 March 2016 (“the Agreement”) in terms
     of which the Company will acquire the entire issued share
     capital of Premier (“the Acquisition”) from the Trustees for the
     time being of the Mashato Trust and the Trustees for the time
     being of the Kookwater Trust.

2.   EFFECTIVE DATE

     The effective date of the Acquisition shall be no later than
     30 September 2016, subject to the conditions precedents as set
     out in paragraph 6 below.

3.   CATEGORISATION

     The Acquisition is a Category 2 transaction for the Company as
     contemplated in the Listings Requirements of the JSE Limited.

     Following the implementation of the Acquisition, Premier will
     become a wholly owned subsidiary of Deneb. Accordingly, its
     Memorandum of Incorporation will comply (and if not, will be
     amended to comply) with paragraph 10.21 of Schedule 10 of the
     Listings Requirements of the JSE to the extent required.

4.   RATIONALE FOR THE TRANSACTION

     Deneb is an investment holding company with interests in
     Property, Branded Product Distribution and Manufacturing.

     The Acquisition is in line with the Company’s growth strategy
     and will allow Deneb to deepen its distribution channels within
     the industrial manufacturing segment.

5.   PURCHASE CONSIDERATION

     The purchase consideration for the Acquisition is R101,500,000
     (one hundred and one million five hundred thousand Rand),
     payable in cash. At the last practical measurement date, being
     31 January 2016, Premier had cash and cash equivalents of
     approximately R31,000,000 (thirty one million Rand), which cash
     will be acquired as part of the purchase consideration.

     The Company will retain R10,000,000 (ten million Rand) in an
     escrow account for twelve months, as security for any legitimate
     claims that may arise under the warranties provided.

     Furthermore, R5,000,000 (five million Rand) of the
     aforementioned escrow amount, or part thereof, will only become
     payable if Premier achieves certain gross profit hurdles for the
     12 month period ending 28 February 2017.

6.   CONDITIONS PRECEDENT

     The Acquisition is subject to the following conditions
     precedent:

     6.1.   The parties entering into certain transaction agreements
            containing the usual provisions for a transaction of this
            nature;

     6.2.   Completion of a due diligence investigation by Deneb;


     6.3.   Obtaining any consents that may be required from third
            parties to implement the Acquisition including any
            consents relating to change in control provisions; and

     6.4.   The Acquisition being approved by the relevant competition
            authorities and the fulfilment of the necessary
            requirements in terms of the Companies Act, No. 71 of 2008
            (as amended) (“the Companies Act”).

7.   DESCRIPTION OF THE BUSINESS OF PREMIER
   
     Premier is a leading manufacturer of galvanised steel roofing
     accessories including gutters, downpipes, ceiling accessories,
     ducting and general rainwater products.

8.   FINANCIAL EFFECTS IN RESPECT OF THE ACQUISITION

     For the 12 month period ending 28 February 2015, being the
     lastest available set of audited financial statements, the value
     of the net assets of Premier was R54,000,000 (fifty four million
     Rand) and the attributable profit of Premier was R13 800 000
     (thirteen million eight hundred thousand Rand).

     The financial information contained in this announcement has not
     been reviewed or reported on by the Company’s auditors.

Cape Town
9 March 2016

Sponsor and corporate adviser
PSG Capital Proprietary Limited

Legal adviser
Prinsloo, Tindle and Andropoulos Inc

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