Acquisition of the business assets of Saint Pie Proprietary Limited RHODES FOOD GROUP HOLDINGS LIMITED (Previously Rhodes Food Group Holdings Proprietary Limited) (Incorporated in the Republic of South Africa) (Registration number 2012/074392/06) JSE share code: RFG ISIN: ZAE000191979 ("RFG" or "the Company") VOLUNTARY ANNOUNCEMENT: ACQUISITION OF THE BUSINESS ASSETS OF SAINT PIE PROPRIETARY LIMITED ("SAINT PIE") Introduction and Overview Shareholders are advised that the Company's wholly owned subsidiary Rhodes Food Group Proprietary Limited ("Rhodes Food") and Saint Pie have entered into an agreement ("Agreement") dated 8 May 2015 in terms of which Rhodes Food will acquire the business of Saint Pie from Saint Pie for an aggregate cash consideration of R20,000,000 (twenty million rand) plus the value of the business liabilities of Saint Pie of approximately R7,000,000 (seven million rand) ("Acquisition"). Description of the business carried on by Saint Pie Saint Pie commenced operations in 1994 and conducts its business from Lydenburg, Mpumalanga. Saint Pie is a producer of pastry products, mainly savoury pies, and distributes to fuel station forecourts, food retailers and independent outlets throughout South Africa. It has distribution centres in Lydenburg, Pretoria and Welkom. Rationale for the Acquisition The board of RFG is of the opinion that the Acquisition presents an attractive investment opportunity which is aligned with RFG's strategy of expanding its business operations through acquisitions. Rhodes Food has a Pies and Pastries facility based in Aeroton, Gauteng, which produces a range of pastry products under its Magpie brand. In addition to its Magpie range, Rhodes Food produces pies and pastries under private label for Woolworths and Corner Bakery. The Acquisition will enable Rhodes Food to extend its pie business operations by adding this additional well established pie brand. The Acquisition will also result in a customer and geographic diversification. The board of RFG is of the view that good synergies will arise from the Acquisition. Purchase consideration Rhodes Food will acquire the business assets of Saint Pie as a going concern for an aggregate cash consideration of R20,000,000 (twenty million rand) plus the value of the business liabilities of Saint Pie of approximately R7,000,000 (seven million rand). The purchase consideration will be paid by Rhodes Food to Saint Pie 7 (seven) days after the effective date, being 1 June 2015. Saint Pie will retain and settle all of its business liabilities. Conditions Precedent The Acquisition is subject to the following conditions precedent: a) Rhodes Food completing a due diligence investigation to its satisfaction by no later than 22 May 2015 or such later date as may be agreed upon; b) the board of directors of Rhodes Food receiving the report pertaining to the due diligence investigation by no later than 22 May 2015, or such later date as may be agreed upon; c) a letter is issued by Rhodes Food to Saint Pie indicating that Rhodes Food is satisfied with the result of the due diligence investigation, in its sole and absolute discretion, by no later than 22 May 2015 or such later date as may be agreed upon; d) the board of directors of Saint Pie approving the Acquisition by no later than 29 May 2015 or such later date as may be agreed upon; e) the shareholders of Saint Pie passing the necessary special resolution in accordance with section 115 of the Companies Act (71 of 2008) for the disposal of the business to Rhodes Food; f) the board of directors of Rhodes Food approving the Acquisition by no later than 29 May 2015 or such later date as may be agreed upon; and g) the lessors for each of the leased premises (which premises are currently leased by Saint Pie from which it conducts its business) either conclude new lease agreements with Rhodes Food, or conclude a cession and assignment agreement in favour of Rhodes Food in respect of each premises in terms of which the existing lease agreements are ceded and assigned to Rhodes Food. The revenue and profits attributable to Saint Pie Saint Pie is expected to generate approximately R60,000,000 (sixty million rand) of revenue in its current financial year to end September 2015 and R4,000,000 (four million rand) of EBITDA during this period. Classification of the transaction The Acquisition does not constitute a categorised transaction in terms of the JSE Listings Requirements and this announcement is therefore made on a voluntary basis. Groot Drakenstein 11 May 2015 Sponsor: RAND MERCHANT BANK (A division of FirstRand Bank Limited) Legal Advisor: Edward Nathan Sonnenbergs Incorporated Date: 11/05/2015 02:25:00 Supplied by www.sharenet.co.za 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. 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