Wrap Text
Propsal to acquire Wepex and Makgarapa, dispose of Imbalie Beauty's subsidiaries businesses, cautionary announcement
IMBALIE BEAUTY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2003/025374/06)
JSE Share code: ILE ISIN: ZAE000165239
("Imbalie Beauty” or “the Company” or “Group”)
PROPOSAL TO ACQUIRE WEPEX AND MAKGARAPA, DISPOSE OF IMBALIE
BEAUTY’S SUBSIDIARIES AND BUSINESSES AND CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
1.1 Shareholders are informed that Imbalie Beauty has on 1 June 2018 agreed to non-
binding proposals which will only become binding upon the signing of definitive
agreements. The proposals are in respect of two acquisitions, which will be subject to
the conditions precedent set out in the paragraphs which follow:
1.2 the acquisition by Imbalie Beauty of all the shares in and claims on loan account
against Wepex Geotechnical (Proprietary) Limited (registration number
2016/468277/07), a company incorporated in South Africa (“Wepex RSA”) from the
shareholders;
1.3 the acquisition by Imbalie Beauty of all the shares in and claims on loan account
against Makgarapa Products (Proprietary) Limited (registration number CO 99/4389),
a company incorporated in Botswana (“Makgarapa”) from the shareholders.
1.4 The proposal to acquire Wepex RSA and Wepex Botswana (a 100% owned subsidiary
of Wepex RSA) is dealt with in one proposal and are jointly hereinafter referred to as
“the Wepex acquisition”. Wepex RSA and Wepex Botswana are jointly hereinafter
referred to as “Wepex”.
1.5 The businesses of Wepex and Makgapara are not related.
2. RATIONALE FOR THE PROPOSED WEPEX ACQUISITION
Imbalie Beauty wishes to dispose of its current business, acquire an unrelated
business and change its name. Wepex has been identified as an acquisition. It will be a
condition precedent of the Wepex acquisition that Makgarapa also be acquired.
3. DESCRIPTION OF THE WEPEX BUSINESS
Wepex is a specialist geotechnical contractor operating in the SADEC region.
Key facts regarding Wepex include:
- Leading Geotechnical Contractor first incorporated in 2006;
- Wepex performs most of its work as sub-contractor to major construction
companies;
- Wepex derives 50% of its revenue from Botswana, providing geotechnical
construction services to the mining sector;
- Wepex has developed several patented products for rock-fall mitigation currently
exclusively used in mining applications.
4. TERMS AND CONDITIONS OF THE PROPOSED WEPEX ACQUISITION
4.1. It is proposed that Imbalie Beauty will acquire all the shares in and claims on loan
account against Wepex for a purchase consideration of R108 000 000 (one hundred
and eight million Rand).
4.2. The proposed purchase consideration will initially be funded by a vendor loan from the
sellers, which loan will thereafter be discharged by the issue to the sellers of
5 400 000 000 (five billion four hundred thousand) shares in Imbalie Beauty at 2 (two)
cents per share.
4.3. The proposed purchase consideration is based on Wepex having achieved profit after
tax of not less than R20 000 000 (twenty million Rand) for the year ended
28 February 2018 and a minimum net asset value of R30 000 000 (thirty million Rand)
on 28 February 2018, as reflected in its audited annual financial statements.
4.4. Any shortfall in profit after tax will result in a downward adjustment of the purchase price
by a multiple of six times the shortfall, and any shortfall in net asset value will result in a
downward adjustment of the purchase price by a Rand, for every Rand of the shortfall.
4.5. After completion of the proposed acquisition, Imbalie Beauty will change its name to
Wepex Limited.
4.6. The major shareholders of Imbalie Beauty will provide irrevocable commitments to
support the proposed transactions, as well as irrevocable commitments to vote in favour
of a waiver of a mandatory offer to minority shareholders required by Section 117 read
with Section 123 of the Companies Act and Companies Regulation 86(4).
4.7. The shares to be issued to the vendors will be subject to the restriction that not more
than 25% (twenty five percent) of the consideration shares will be disposed of prior to
the first anniversary of the effective date of the transactions.
5. CONDITIONS PRECEDENT TO THE PROPOSED WEPEX ACQUISITION
5.1 The proposed Wepex acquisition will only become binding upon signature of a
definitive agreement, which in turn will be subject to the fulfilment of the following
conditions precedent:
5.2 Imbalie Beauty being satisfied with the outcome of the due diligence investigation to
be conducted on Wepex;
5.3 Imbalie Beauty disposing of the following subsidiaries:
- Placecol Fresh Beauty (Pty) Limited;
- Imbalie Beauty Training Academy (Pty) Limited;
- Dream Nails Beauty (Pty) Limited;
- Imbalie Innovvation (Pty) Limited;
- Enjoy Beauty (Pty) Limited; and
- Placecol Skin Care Clinic (Pty) Limited
and warranting that after the disposals, Imbalie Beauty will have no actual or
contingent liabilities;
5.4 Approval by the shareholders of Wepex of the transaction and waiver of the
mandatory offer to minorities in terms of Companies Regulation 86(4);
5.5 Approval by the Imbalie Beauty board and its shareholders in respect of the
transaction, the increase in authorised shares and the issue of shares to the
vendors;
5.6 All regulatory approvals which may be required, including Competition Commission
approval;
5.7 To the extent necessary, the consent of counterparties to material contracts in
respect of the change in control of Wepex;
5.8 The vendors and other key employees of Wepex will sign service and restraint of
trade agreements with the Company;
5.9 That the parties enter into a more detailed binding agreement reflecting these
provisions, warranties and indemnities that are customary in transactions of this
nature, and such other terms and conditions as may be acceptable to both parties.
6. RATIONALE FOR THE PROPOSED MAKGARAPA ACQUISITION
It will be a condition precedent of the Wepex acquisition that Imbalie Beauty acquires
Makgarapa.
7. DESCRIPTION OF THE MAKGARAPA BUSINESS
Makgarapa is a construction and services company based in Orapa, Botswana.
Key facts regarding Makgarapa include:
- Makgarapa is strategically situated inside the Orapa lease-area to service the
upcoming infrastructure developments at, in and around the lease-area;
- Makgarapa has an existing ready-mix plant and quarry servicing the Orapa
diamond fields;
- Makgarapa has industrial licences to manufacture pre-cast concrete elements for
the local market; and
- Supply Geotechnical companies’ materials for lateral support work.
8. TERMS AND CONDITIONS OF THE PROPOSED MAKGARAPA ACQUISITION
8.1. It is proposed that Imbalie Beauty will acquire all the shares in and claims on loan
account against Makgarapa for a purchase consideration of P70 000 000 (seventy
million Pula).
8.2. P60 000 000 (sixty million Pula) of the proposed purchase consideration will be settled
on the effective date of this transaction, and the balance in two equal payments of
P5 000 000 (five million Pula) on 31 July 2019 and 31 July 2020.
8.3. The proposed purchase consideration is based on Makgarapa:
- having achieved profit after tax of not less than P15 700 000 (fifteen million seven
hundred thousand Pula) for the period ending 30 June 2018;
- having a minimum net asset value of P43 000 000 (forty-three million Pula) on
30 June 2018, as reflected in its audited annual financial statements for such
period;
- having achieved profit after tax of not less than P17 500 000 (seventeen million
five hundred thousand Pula) for the period ending 31 July 2019;
- having achieved profit after tax of not less than P19 500 000 (nineteen million five
hundred thousand Pula) for the period ending 31 July 2020.
8.4. Any shortfall in profit after tax will result in a downward adjustment of the purchase price
by a multiple of four times the shortfall, and any shortfall in net asset value will result in
a downward adjustment of the purchase price by a Rand, for every Rand of the
shortfall.
8.5. After completion of the proposed acquisition, Imbalie Beauty will change its name to
Wepex Limited.
8.6. The major shareholders of Imbalie Beauty will provide irrevocable commitments to
support the proposed transaction.
9. CONDITIONS PRECEDENT TO THE PROPOSED MAKGARAPA ACQUISITION
9.1. The proposed Makgarapa acquisition will only become binding upon signature of a
definitive agreement, which in turn will be subject to the fulfilment of the following
conditions precedent:
9.2. Imbalie Beauty being satisfied with the outcome of the due diligence investigation to be
conducted on Makgarapa;
9.3. Approval by the Imbalie Beauty board and its shareholders in respect of the transaction;
9.4. All regulatory approvals which may be required, including Competition Commission
approval;
9.5. To the extent necessary, the consent of counterparties to material contracts in respect
of the change in control of Makgarapa;
9.6. The vendors and other key employees of Makgarapa will sign service and restraint of
trade agreements with the Company;
9.7. That the parties enter into a more detailed binding agreement reflecting these
provisions, warranties and indemnities that are customary in transactions of this nature,
and such other terms and conditions as may be acceptable to both parties;
9.8. The major shareholders of Imbalie Beauty will provide irrevocable commitments to
support the proposed transaction.
10. REVERSE LISTING
The reverse listing of Wepex will be subject to approval by the JSE.
11. CAUTIONARY ANNOUNCEMENT
Shareholders are advised that, in the light of the fact that definitive agreements still
have to be entered into, whereafter numerous conditions precedent referred to above
have to be fulfilled, all of which may have a material effect on the price of the
Company’s securities, caution is required to be exercised by shareholders when
dealing in their securities until a further announcement is made.
12. FURTHER ANNOUNCEMENT
Shareholders will be notified once the definitive agreements have been entered into.
Johannesburg
5 June 2018
Designated adviser
Exchange Sponsors
Date: 05/06/2018 08:54:00 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.
Sharenet Sites 
