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Acquisition of 30% of CannAfrica Proprietary Limited
LABAT AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1986/001616/06)
(“Labat Africa” or “the Company”)
ISIN Code: ZAE000018354 Share Code: LAB
FSE Code: LEI 9845000R73DF5EE41J88
ACQUISITION OF 30% OF CANNAFRICA PROPRIETARY LIMITED (CannAfrica)
BACKGROUND AND TERMS
In terms of a Sale of Business and Assets Agreement, Labat Africa will acquire the remaining 30%
interest in CannAfrica from Mr Herschel Maasdorp for a consideration of R6 428 571 to be settled
through the issue of 29 924 251 ordinary Labat Africa shares at an issue price of R0.12 per share
and the balance in cash of R2 837 660, which will be offset against a loan account owed by
Mr Maasdorp to CannAfrica. The effective date of the acquisition is 1 June 2023.
RATIONALE
The CannAfrica agreement is in line with the strategy to expand the Labat Healthcare business
and further entrench their position in the Cannabis market in Southern Africa. CannAfrica is an
established and fully integrated Cannabis business offering.
The acquisition of the minority shareholding is to align Mr Maasdorp’s interests in the larger
cannabis healthcare business and the strategy of Labat Africa.
The rollout of Labat Healthcare retail stores is progressing well through both company-owned
stores and franchisees, with presence in the following areas:
Owned:
- Ballito Junction, Kwazulu-Natal
- Springs Mall, Springs (owned during year under review but sold to a franchisee after year
end)
- Town Square, Weltevreden Park
- Boardwalk, Port Elizabeth (owned during year under review but sold to a franchisee after
year end)
Franchised:
- Benmore Gardens, Sandton
- Hartbeespoort
- Rustenburg
- Blu-Bird, Athol
- East Point Mall, Boksburg
- Florida, Roodepoort
- Moreletta Park
- The Moot
- Centurion
- Greenacres, Port Elizabeth
The success of the CannAfrica stores is clearly visible in the sale of two corporate owned stores to
franchisees. It is a business model that the Company will continue to deploy.
Subsequent to year end, the following additional stores/areas have been signed up or identified,
to be rolled out in this calendar year:
- Umhlanga
- Benoni
- Edenvale
- Kloof/upper highway
- Newcastle
- The Pavilion
- Durban North
- Bryanston
- Tzaneen
- Polokwane
- Jefferies Bay
- Cape St Francis
- East London (Nahoon, Berea, Vincent)
The above store locations will be a combination of franchise stores and Corporate owned flagship
stores.
Cannafrica will also continue to offer franchise rights to interested individuals who may contact
the company at 011 675 6841.
SUSPENSIVE CONDITIONS OF THE ACQUISITION
The CannAfrica Acquisition is subject to the issue and listing of the shares for the CannAfrica
Acquisition.
FINANCIAL INFORMATION
Per the management accounts for the year ended 31 May 2023, the estimated profit before
taxation amounted to R672 458 and the net asset value was (R2 409 959). The financial information
is in the process of being audited and is presented before final audit adjustments.
CLASSIFICATION OF THE TRANSACTION
The acquisition of the balance of the CannAfrica shares is a Category 2 transaction and
Mr Maasdorp is not a related party to Labat Africa as defined in the JSE Listings Requirements.
Accordingly, the acquisition does not require a fairness opinion or shareholder approval.
JOHANNESBURG
26 July 2023
Sponsor
AcaciaCap Advisors
Date: 26-07-2023 08:50:00
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