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Acquisition of Sandown Motors Holdings Proprietary Limited's Western Cape Dealership Business and Strategic Property
Super Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1943/016107/06)
Share code: SPG
ISIN: ZAE000161832
(“Super Group”)
ACQUISITION OF SANDOWN MOTORS HOLDINGS PROPRIETARY LIMITED’S WESTERN CAPE
DEALERSHIP BUSINESS AND A STRATEGIC PROPERTY
1. Introduction and overview of the Transaction
Super Group has concluded an agreement (“the Sale of Business
Agreement”) with Sandown Motor Holdings Proprietary Limited (“the
Seller”), and Daimler AG (“Daimler”) and Mercedes-Benz South Africa
Limited (“Mercedes-Benz”), as interested parties, in terms of which
Super Group Trading Proprietary Limited (“the Purchaser”), a wholly
owned subsidiary of Super Group Holdings Proprietary Limited, a Super
Group Company, will acquire the Western Cape dealership business (as
more fully described below) (“the Business”) from Sandown Motors as a
going concern (“Sandown Motors Acquisition”).
As a condition precedent to the Sandown Motors Acquisition, the
Purchaser will also acquire a property located at Century City from
which the Seller operates one of the dealerships which forms the subject
matter of the Sandown Motors Acquisition from Koppieview Proprietary
Limited (“Koppieview”), a subsidiary of Mercedes-Benz (“Property
Acquisition”).
The Sandown Motors Acquisition and the Property Acquisition together
constitute the Transaction.
2. Nature of business
Sandown Motors is a subsidiary of Mercedes-Benz.
It operates, inter alia, the Business comprising five authorised
Mercedes-Benz motor passenger vehicle dealerships, three Mercedes-Benz,
Freightliner and Fuso commercial vehicle dealerships and one Fiat and
Chrysler motor dealership located in Cape Town, Stellenbosch, Paarl and
Worcester.
3. Consideration
3.1. The purchase price for the Sandown Motors Acquisition is between R492
million and R512 million, which amounts to a price earnings multiple
of between 8.3 and 8.7 times. The aforementioned purchase price plus
costs will be settled by Super Group from cash resources.
3.2. In addition to the above, Super Group will purchase vehicle inventory
estimated at R580 million, which will be financed by a primary
facility from Mercedes-Benz Financial Services South Africa
Proprietary Limited (“MBFS”) and a secondary facility from Wesbank, a
division of First Rand Bank Limited (“Wesbank”).
3.3. The purchase price of the Property Acquisition is R200 million, which
will be financed by a local financial institution.
4. Value of the net assets acquired and profits attributable to those
assets
4.1. The net asset value of the Transaction will be approximately between
R880 million and R900 million.
4.2. The profit after taxation associated with these assets is R59
million.
5. Rationale for the Transaction
Super Group’s strategy over the past six years has been to make
selective acquisitions in its core businesses namely Supply Chain,
Fleet Management and Dealerships in South Africa and internationally.
The acquisition of the Business is in line with this strategy and
represents an opportunity for the Group to build a dealership footprint
in the second largest car market in the South Africa.
The Group has a policy of owning dealership properties in strategic
locations in South Africa. The Property Acquisition is in line with
this policy.
6. Conditions precedent
The Transaction remains subject to the following conditions precedent:
1. The signature of the sale agreement for the Property Acquisition and
such agreement becoming unconditional.
2. Approval of the Transaction by the Competition Authorities within 70
business days of signature of the Sale of Business Agreement.
3. Cession of the leases to the Purchaser, or conclusion of new leases
with the relevant counterparties by the Purchaser, in regard to the
properties from which the Business operates within 60 business days
of signature of the Sale of Business Agreement.
4. The cession of the Seller’s rights and obligations under the
floorplan agreements held by the Seller with MBFS and Wesbank within
60 business days of signature of the Sale of Business Agreement.
5. The furnishing of the following guarantees to the Seller as security
for payment of the purchase price for the Business within seven
business days of signature of the Sale of Business Agreement –
a. MBFS in an amount of R580 million; and
b. Investec Bank Limited in an amount of R512 million.
6. The furnishing to Koppieview of a bank guarantee by a local financial
institution in an amount of R200 million, as security for payment of
the purchase price in regard to the Property Acquisition within
fifteen business days of the signature of the Sale of Business
Agreement; and
7. The satisfactory completion of the due diligence investigation by
each of Daimler, Mercedes-Benz and the seller and/or their
representatives into the business and the affairs of the Purchaser
within 60 business days of signature of the Sale of Business
Agreement.
7. Effective date
The effective date of the Sandown Motors Acquisition is subject to the
conditions precedent being met and is expected to be between 1 August
and 1 September 2016. The Property Acquisition is expected to be
completed shortly thereafter.
8. JSE categorisation
The Transaction is a category 2 transaction in terms of paragraph
9.5(a) of the JSE Listings Requirements.
Sandton
17 May 2016
Sponsor: Deutsche Securities (SA) Proprietary Limited
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