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Acquisition of Governors’ Camp group of companies (Kenya and Rwanda) and withdrawal of cautionary announcement
Wilderness Holdings Limited
(Registration number 2004/2986)
(Registered as an external company in South Africa Registration number 2009/022894/10)
ISIN: BW0000000868
Share code: WIL
(“Wilderness” or “the Company” or “WHL”)
ACQUISITION OF GOVERNORS’ CAMP GROUP OF COMPANIES (KENYA AND RWANDA) AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction and overview of the Acquisition
1.1. Wilderness has concluded agreements with Monitor International Holdings Limited (“the
Vendors”) to acquire 51% of the shares and shareholder loan accounts of:
1.1.1. Musiara Limited, Governors’ Aviation Limited, Goodison Ninety One Limited,
Goodison Forty Two Limited (all registered and operating in Kenya); and
1.1.2. Governors’ Camps Rwanda Limited and Governors’ Safaris Rwanda Limited (both
registered and operating in Rwanda).
The above acquisitions constitute the Transaction and the above-named companies own and
operate the Governors’ Camp Collection of camps and lodges in East Africa.
1.2 The remaining 49% of the equity in these companies will continue to be held by the Vendors
who represent the interests of the founders and previous and present management.
1.3 This is not a related party transaction.
2. Nature of the business
The Governors’ Camp Collection, founded in 1976, owns and operates a selection of award-
winning safari camps and lodges in the heart of East Africa's best game viewing areas. This is
one of the oldest and most iconic safari brands in Africa. The location in the Masai Mara
National Reserve in Kenya has been featured in multiple BBC and other wildlife
documentaries. The brand was expanded into Rwanda in 2007, through the addition of
Sabyinyo Silverback Lodge, a mountain gorilla trekking offering in Virunga National Park.
3. Rationale for the Transaction
3.1. The Wilderness Group’s current operations are concentrated in southern Africa, and
management is of the view that acquisition of a controlling stake in the Governors’ business
represents a compelling opportunity for expansion into East Africa. The parties also believe
that the following synergies can be realised post-merger:
3.1.1. The Governors’ main market is sourced from Europe, whereas Wilderness Safaris’
main source market is the United States. This creates cross selling opportunities.
3.1.2. Best operating practises, in terms of lodge operations, aviation and reservations, can
be shared to mutual advantage.
3.1.3. Both parties are committed to a program to boost future occupancies and revenue
by renovation of the lodges and targeted marketing expenditure.
3.2. The Governors’ business also represents an ideal springboard for expansion into other East
African countries using a well-known local brand and management who are familiar with
local markets and conditions.
3.3. WHL has made this investment for the above strategic reasons and the impact on the
Group’s earnings will be limited in the short term. It is believed that there is potential for
these assets to make a meaningful contribution to earnings in the medium term once the
Kenyan safari industry has returned to previous levels and the expansion potential has been
exploited.
3.4. The Management, including the Managing Director and the Marketing Director, will remain
with the Governors’ business after the conclusion of the Transaction.
4. Consideration
The total purchase price for shares and shareholder loan accounts being acquired is US$6.2
million and this sum will be settled in cash.
5. Profits attributable to the assets the subject of the transaction
5.1 The valuation of the businesses in the scope of the Transaction is based upon an assessment
of future cash flows expected to be generated by the businesses being acquired. This value is
therefore largely attributable to the concession rights of the businesses, as opposed to the
tangible assets.
5.2 The losses attributable to the assets the subject of the transaction were US$0.4 million (BWP
4.1 million) for the year ended 31 March 2015, after adding back once-off costs of
restructuring and exclusion of assets not included in the transaction. Applied to the results
of WHL for the year ended 28 February 2015, this would have resulted in a 5.7% reduction in
earnings per share to 30.70 thebe.
6. Conditions precedent
The Transaction remains subject to a number of conditions precedent of which the most
important are:
6.1. Confirmation by the Competition Authority of Kenya (CAK) that the Transaction is excluded
from the requirement to secure CAK approval.
6.2. Satisfactory completion of all due diligence processes.
7. Effective date
The effective date of the Transaction is subject to the conditions precedent being met and is
expected to be around 19 May 2016.
8. BSE and JSE Limited (“JSE”) Listings Requirements
Subsequent to the acquisition, the certificates of incorporation and articles of association of
the companies acquired in terms of the Transaction will be reviewed to ensure that they do
not prevent WHL from complying with its obligations in terms of the BSE and JSE Listings
Requirements.
9. BSE and JSE categorization
The Transaction is a category 3 transaction in terms of paragraph 9.5(b) of the BSE Listings
Requirements and Category 2 transaction in terms of paragraph 9.5 (a) of the JSE Listings
Requirements.
10. Withdrawal of Cautionary
Shareholders are referred to the cautionary announcements of 17 March 2015, 21 May
2015, 26 June 2015, 31 July 2015, 1 September 2015, 17 November 2015, 29 December
2015, 10 February 2016 and 22 March 2016 and are advised that, as agreements have been
concluded with Monitor International Holdings Limited, caution is no longer required when
dealing in the companies’ securities.
The Company’s primary listing is on the BSE and its secondary listing is on the JSE.
By Order of the Board
Gaborone, 6 April 2016
+267 392 6886
JSE Sponsor
RAND MERCHANT BANK (A division of First Rand Bank Limited)
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