LONG4LIFE LIMITED - Acquisition By Long4Life Of Chill Holdings Proprietary Limited (Chill) And Withdrawal Of Cautionary Announcement

Acquisition By Long4Life Of Chill Holdings Proprietary Limited (“Chill”) And Withdrawal Of Cautionary Announcement

LONG4LIFE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2016/216015/06)
Share code: L4L
ISIN: ZAE000243119
(“Long4Life” or “the Company”)

ACQUISITION BY LONG4LIFE OF CHILL HOLDINGS PROPRIETARY LIMITED (“CHILL”) AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

1. INTRODUCTION

   Long4Life is pleased to announce that it has concluded an agreement to acquire, with effect from 1
   July 2017 (locked-box date), the entire issued share capital of Chill from its shareholders, being the
   existing senior management team of Chill (“Management”), Africa Beverage Ventures (Pty) Ltd and
   Raubenbel (Pty) Ltd (“the Sellers”) (“the Acquisition”).


2. OVERVIEW OF CHILL

    Founded in 2001 in the Western Cape, Chill is a producer, packer and distributor of beverages with
    storage and distribution facilities located in major cities across South Africa. Its core operations
    involve the production of Chill’s own brands of non-alcoholic beverages as well as contract packing
    of both alcoholic and non-alcoholic beverages for its customers.

    Chill’s portfolio of strong beverage brands includes Score Energy, Fitch & Leedes, Bashew’s and
    Country Club, amongst others.

3. RATIONALE FOR THE ACQUISITION

    The acquisition of Chill provides Long4Life with an opportunity to enhance its presence in the
    growing beverage sector.

    Chill provides:
     -    an experienced, innovative management team with a proven track record;
     -    fully integrated in-house business platform from product conception and development,
          through production, to sales and marketing;
     -    world class production capability;
     -    leading beverage brands; and
     -    an expanding export division.

4. PURCHASE CONSIDERATION AND SETTLEMENT MECHANISM

    Chill recorded an EBITDA of R86 million translating to a net profit after tax of R46 million for the
    financial year ended 30 June 2017. The net asset value at that date was R135 million. These figures
    were extracted from Chill’s audited financial statements which were prepared in terms of IFRS.

    The Purchase Consideration will be determined by reference to the actual EBITDA achieved by Chill
    for the year ending 30 June 2018 (“FY2018”).
   The minimum purchase consideration for the entire issued share capital of Chill is R452 million, after
   deducting net debt of R182 million (“Purchase Consideration”).

   The Purchase Consideration will be adjusted upwards by 7.05x for each Rand of FY2018 EBITDA
   achieved, as follows:

    FY2018 EBITDA                     Maximum incremental                Maximum Purchase
                                      Purchase Consideration             Consideration
                                      adjustment
    R90 million – R120 million        R211.5 million                     R664 million
    R120 million – R144 million       Nil                                R664 million
    R144 million – R154 million       R70.5 million                      R734 million

   The Purchase Consideration will be settled as follows:
    - 75% in cash; and
    - 25% through the issue of Long4Life shares at a price of R5.21 per share (“the Share Issue”).

   The Share Issue will be made to Management in part settlement of their portion of the Purchase
   Consideration. Any disposal of these shares will be subject to certain restrictions over a 3 year
   period.


5. CONDITIONS PRECEDENT

   The Acquisition is subject to the fulfilment (or waiver) of certain conditions precedent, inter alia:

   - approval by the competition authorities;
   - consents being obtained from certain customers and lenders of Chill;
   - amendments to certain operational agreements;
   - employment and restraint agreements being entered into between Long4Life and certain
     members of the Chill management team; and
   - confirmation by Long4Life that it is satisfied that no material adverse change in regard to Chill
     business having been occurred.

6. CATEGORISATION

   The Acquisition is classified as a Category 2 transaction for Long4Life in terms of the Listings
   Requirements of the JSE.

   There is no matter in the constitutional documents of Chill which will preclude Long4Life from
   continuing to comply with its obligations in terms of the Listings Requirements of the JSE.

7. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

   Shareholders are referred to the cautionary announcement dated 12 October 2017 and are advised
   that as a result of the full terms of the Acquisition having been released, shareholders no longer
   need to exercise caution when dealing in their Long4Life securities.

Johannesburg
28 November 2017

Financial Advisor and Sponsor to Long4Life
The Standard Bank of South Africa Limited

Legal adviser to Long4Life
ENSafrica

Financial Advisor to the shareholders of Chill
Investec Bank Limited

Legal Adviser to the shareholders of Chill
DLA Piper

Date: 28/11/2017 09:44:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.