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Disposal of Agriplas Proprietary Limited
KAL GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2011/113185/06)
Share code: KAL
ISIN: ZAE000244711
("the Group" or "the Company")
DISPOSAL OF AGRIPLAS PROPRIETARY LIMITED
1. INTRODUCTION
1.1. Shareholders are advised that the Company and its wholly owned subsidiary,
Agrimark Operations Limited ("Agrimark") (collectively, "the Sellers"), have entered
into a Sale of Shares and Claims Agreement ("the Agriplas Sale Agreement") with
Agriplas Holdings Proprietary Limited, ("Agriplas Holdings" or "the Purchaser"), an
investment holding company owned by Sana Partners Fund 2, in terms of which the
Company will dispose of the entire issued share capital of Agriplas Proprietary
Limited ("Agriplas") ("Sale Shares") and Agrimark will dispose of all claims it holds
against Agriplas ("Sale Claims") (collectively hereafter referred to as the "Sale
Equity") to the Purchaser, for a purchase consideration determined as set out in
paragraph 4.1 below ("Agriplas Disposal").
1.2. In addition to the Agriplas Disposal, the Company, Agriplas, Agrimark and the
Purchaser have entered into a Sale of Property Agreement ("Property Sale
Agreement"), in terms of which Agrimark will sell to Agriplas an immovable property,
together with all permanent improvements thereon, being Erf 13562 Bellville, in extent
circa 3,6 (three comma six) hectares, the property on which the Agriplas
manufacturing facility based in Stikland is situated ("Property"), for a purchase
consideration as set out in paragraph 4.3 below ("Property Disposal").
(hereafter collectively referred to as "the Disposals")
1.3. Sana Partners Fund 2, is an en commandite private equity partnership managed by
Sana Partners Proprietary Limited.
2. THE BUSINESS OF AGRIPLAS AND THE PROPERTY
2.1. Agriplas is a leading supplier of quality irrigation products and specialises in the
manufacture and sale of irrigation equipment through an extensive network of agents
within South Africa, while also exporting products to international customers. Agriplas
primarily serves the agricultural sector, with an additional focus on industrial water
filtration. Additionally, Agriplas' products are supplied to the mining industry for heap
leaching, dust suppression and mine rehabilitation.
2.2. The Property is a letting enterprise and is being sold as a going concern.
3. RATIONALE FOR THE DISPOSALS
The Disposals forms part of the Company's strategy to exit its non-core manufacturing
operations and focus its resources on its core retail and ancillary offering.
4. PURCHASE CONSIDERATION
4.1. The Purchase Consideration for the Sale Equity shall be an amount equal to
R155 000 000 (one hundred and fifty-five million Rand) payable by the Purchaser to
the Sellers ("Sale Equity Purchase Price"), subject to the amount being adjusted by
the effective date net working capital variance to the target net working capital, which
will be calculated with reference to the average working capital days over the last 24
(twenty four) months up to the effective date, being the last calendar day of the month
in which the last suspensive condition is fulfilled or waived, as the case may be
("Effective Date").
4.2. The Sale Equity Purchase Price will be paid by the Purchaser to the Sellers on the
closing date, being 15 (fifteen) business days following the date on which the
unaudited balance sheet of Agriplas as at the Effective Date is calculated and agreed
or approved in the manner as set out in the Agriplas Sale Agreement, or such earlier
date as agreed to between the parties in writing ("Closing Date").
4.3. The Purchase Consideration for the Property shall be an amount equal to
R67 500 000 (sixty-seven million five hundred thousand Rand) inclusive of VAT at
the rate of zero percent ("Property Purchase Price"), which Property Purchase Price
shall be paid on the date of registration of transfer of the Property ("Registration
Date") to the Sellers.
4.4. The maximum aggregate of the Sale Equity Purchase Price and the Property
Purchase Price has been capped below a category 1 (one) transaction threshold in
terms of the JSE Listings Requirements ("Listings Requirements").
5. USE OF PROCEEDS
The proceeds of the Disposals will be used to reduce the Group's bank funding in the
short term and bolster the Group's balance sheet for future investment opportunities,
whilst also considering dividend yield improvements.
6. EFFECTIVE DATE OF THE DISPOSALS
6.1. The benefit and risk relating to the Sale Equity shall pass to the Purchaser on the
Effective Date and the ownership of the Sale Equity shall pass to the Purchaser on
the Closing Date.
6.2. The effective date of the Property Disposal will be the Registration Date.
7. SUSPENSIVE CONDITIONS
7.1. The Agriplas Disposal is subject to the fulfilment or waiver (if applicable) of
suspensive conditions suitable for a transaction of this nature, which include the
following material suspensive conditions:
7.1.1. on or before 31 January 2026, or such later date as agreed to between the parties,
the Competition Commission and/or Competition Tribunal, as the case may be, has
in writing, either unconditionally approved the Agriplas Disposal or subject to
conditions acceptable to the parties;
7.1.2. on or before the 5th (fifth) business day after signature date the respective board of
directors of the Purchaser and the Sellers having authorised the respective parties
to conclude and implement the various transaction agreements; and
7.1.3. on or before the 1st (first) business day after the fulfilment of the suspensive
conditions in paragraphs 7.1.1 to 7.1.2:
7.1.3.1. the relevant transaction agreements becoming unconditional; and
7.1.3.2. the conveyancer (as defined in the Property Sale Agreement) confirms in writing
that Agrimark (as seller of the Property) has signed all necessary transfer
documentation and paid all amounts due by Agrimark as is required to effect the
transfer of the Property to Agriplas as soon as possible after the Closing Date.
7.2. The Property Disposal is subject to the fulfilment or waiver (if applicable) of the
outstanding suspensive condition that on or before 31 January 2026, or such later
date as the parties may agree in writing, the Agriplas Sale Agreement becomes
unconditional.
8. SIGNIFICANT TERMS OF THE AGRIPLAS SALE AGREEMENT AND THE PROPERTY SALE AGREEMENT
8.1. The Agriplas Sale Agreement and the Property Sale Agreement contains warranties
and indemnities suitable for transactions of their nature.
8.2. In terms of the Agriplas Sale Agreement, the Sellers undertake to not, and subject to
reasonable exceptions, for a period of 2 (two) years from the Effective Date, directly
or indirectly, engage or invest in any business within each magisterial district in the
Republic of South Africa that manufactures or sells the products manufactured by
Agriplas in the ordinary course of business, as at the signature date and/or the
Effective Date, nor may they solicit any customer of Agriplas which, in the 12 (twelve)
months prior to the Effective Date, had been actively solicited by Agriplas as a
potential client or any person who was employed by Agriplas at the Effective Date.
9. FINANCIAL INFORMATION
9.1. In terms of the latest unaudited condensed consolidated interim financial statements
of the Group for the six months ended 31 March 2025, the net asset value of Agriplas
(including the Sale Claims) amounted to R71 771 345 (seventy-one million seven
hundred and seventy-one thousand three hundred and forty-five Rand) and the
attributable profit after tax of Agriplas amounted to R7 761 936 (seven million seven
hundred and sixty-one thousand nine hundred and thirty-six Rand).
9.2. In terms of the latest unaudited condensed consolidated interim financial statements
of the Group for the six months ended 31 March 2025, the net asset value of the
Property amounted to R15 502 105 (fifteen million five hundred and two thousand
one hundred and five Rand) and the attributable profit after tax of the letting
enterprise, excluding any inter-group rental charged to Agriplas amounted to
R401 353 (four hundred and one thousand three hundred and fifty-three Rand).
10. CLASSIFICATION OF THE DISPOSALS
The Disposals, aggregated for purposes of categorisation in terms of the Listings
Requirements, constitute a category 2 (two) transaction.
Paarl
22 September 2025
Transaction Advisor and Transaction Sponsor
Valeo Capital (Pty) Ltd
Legal Advisor
Andersen South Africa
Sponsor
PSG Capital
Date: 22-09-2025 04:40:00
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