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Acquisition of the Business of Mapflex South Africa
MASTER PLASTICS LIMITED
Incorporated in the Republic of South Africa
(Registration number 2016/323930/06)
Share code: MAP ISIN: ZAE000242921
(“Master Plastics” or “the Company”)
ACQUISITION OF THE BUSINESS OF MAPFLEX SOUTH AFRICA
1. Introduction
Shareholders are advised that Peninsula Packaging, a division of Master Plastics, has entered into
agreements in terms of which:
• the Company will acquire from Mapflex SA Proprietary Limited (“Mapflex”), as a going concern,
the business of Mapflex (“the Mapflex Business”); and
• the Company will acquire from Afripack Consumer Flexibles Proprietary Limited (“ACF”), as a
going concern, the pouch making business supplying certain pouches to Mapflex, which Mapflex
then sells into the market (“the Pouch Business”),
(collectively referred to herein after as “the Transaction”).
The effective date of the Transaction is 1 October 2018 (“the Effective Date”).
2. Rationale for the Transaction
The Transaction, following its successful implementation, will enhance the product offering, technology
and market position of the Company and will allow for the extraction of the synergistic benefits that
exist between the Company and the Mapflex Business.
3. Overview of Mapflex
Mapflex, which employees 25 staff, operates from a BRC-accredited facility located in Muizenberg,
Cape Town. It is a modified atmosphere packaging (“MAP”) specialist focused mainly in the vegetable
segments of the MAP market. The main strategic objective of the Mapflex Business is to improve on
the traditional method of fresh vegetable packaging for large-scale retailers by offering innovative
packaging material and solutions using equilibrium modified atmosphere packaging (“E-MAP”)
technology operated under a sole license in South Africa. The major benefits offered by the E-MAP
technology over traditional forms of packaging is extended shelf life and a significant reduction in food
waste. The packaging produced by the Mapflex Business is also fully recyclable.
4. Sellers
The ultimate beneficial shareholders of Mapflex are the Van Dillewijn Group BV, incorporated in the
Netherlands and the Constantia Flexibles Group GmbH, incorporated in Austria. The ultimate
beneficial shareholder of ACF is the Constantia Flexibles Group GmbH. The Van Dillewijn Group BV is
owned by Mr. Peter Vlug and Mr. Mark de Krosse, whilst the Constantia Flexible Group GmbH is
owned by a consortium consisting of the Wendel Group, the Arepo Foundation and Maxburg Capital
Partners.
5. Purchase consideration and payment arrangements
The purchase consideration of R16,100,000 less the ACF employee liabilities to be assumed of R8,516
(“the Aggregate Purchase Consideration”) will be attributed as follows to the various Transaction
components:
• R15,300,000 for the Mapflex Business to be acquired from Mapflex; and
• R800,000 less the employee related liabilities of R8,516 to be assumed for the Pouch Business to
be acquired from ACF.
The Aggregate Purchase Consideration will be settled by the Company as follows:
• on the Effective Date, by way of direct settlement of the invoice discounting facility and medium-
term loan provided to Mapflex by Nedbank Limited and a cash payment of R8,000,000 to Mapflex;
• within 90 days after the Effective Date, the differential between R15,300,000 and the aggregate of
the afore-mentioned amounts to Mapflex; and
• upon the successful commissioning of the pouch machines, an amount of R800,000 less the
employee liabilities of R8,516 to be assumed for the Pouch Business to be acquired from ACF,
expected to be within 5 business days of the Effective Date.
6. Source of funding
The Aggregate Purchase Consideration will be paid by the Company from the following sources of
funding:
• R800,000 less the employee liabilities of R8,516 to be assumed for the Pouch Business to be
acquired from ACF, from existing facilities;
• R15,300,000 to Mapflex from a medium-term loan facility extended to the Company by Nedbank
Limited to facilitate this element of the Transaction. This medium-term loan will attract a prime
related interest rate and is repayable by the Company over a period of 60 months.
7. Financial information
The net book value of the assets and liabilities being acquired by the Company as at the Effective
Date equates to the Aggregate Purchase Consideration.
As at 30 December 2017, representing the financial year end of the various parties being contracted
with by the Company, the Mapflex Business and Pouch Business had a net book value of
R13,407,804, an attributable turnover of R47,472,3672 and earnings before interest, taxation,
depreciation and amortisation of R3,985,170.
8. Conditions precedent
All conditions precedent to the Transaction has been fulfilled at the date hereof and the Transaction will
accordingly be implemented on the Effective Date.
9. Classification of the Transaction
The Transaction is classified as a category 2 transaction in terms of the JSE Listings Requirements
and accordingly no shareholder approval is required.
Sandton
1 October 2018
Designated Adviser
Merchantec Capital
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