Acquisition of the trading business housing Buccaneer Slurry Pumps TORRE INDUSTRIES LIMITED Incorporated in the Republic of South Africa (Registration number: 2012/144604/06) Share code: TOR ISIN: ZAE000188629 (“Torre” or “the Company”) ACQUISITION OF THE TRADING BUSINESS HOUSING BUCCANEER SLURRY PUMPS 1. INTRODUCTION The board of directors of Torre (“the Board”) is pleased to announce that it has, through its wholly-owned subsidiary Torre Holdings Proprietary Limited (“Torre Holdings”), concluded an agreement with Mining and Slurry Technologies Proprietary Limited (“MST”) to acquire the trading business housing the Buccaneer brand of Slurry Pumps (“the Acquisition”), effective 1 August 2018 (“effective date”). 2. OVERVIEW OF BUCCANEER SLURRY PUMPS Buccaneer Slurry Pumps are designed, manufactured and assembled in South Africa. The brand is known for its robust and heavy- duty slurry pumps for all abrasive applications, providing solutions to the mining industry with its range of horizontal and vertical centrifugal pumps. 3. RATIONALE FOR THE ACQUISITION The Acquisition provides a unique opportunity for Torre to expand its business and product offering by acquiring the trading business of a quality South African slurry pump business as a bolt-on acquisition to its existing pump business in the Capital Equipment segment. 4. FINANCIAL INFORMATION The value of the net assets that are subject to the Acquisition, including the moulds and pattern equipment, and intangible assets being the patent, trademark, designs, customer relationships, inventory and goodwill (“trading business”) is R33 million. Specific historical profits attributable to the acquired net assets cannot be determined reliably as the trading business being acquired was not separately reported on by MST and was historically aggregated with the other businesses of MST. The Board anticipates that the Acquisition will immediately be earnings accretive to Torre. Operating profit relating to the Acquisition is forecasted by the Company to be between R5 million to R10 million for the next 12 months, based on estimated historical results and taking into account Torre’s increased product offering and established routes to market. This forecast has not been audited, reviewed or reported on by Torre' auditors. 5. THE ACQUISITION CONSIDERATION Torre will acquire the trading business from MST for a maximum cash consideration of R33 million, of which up to R15 million (dependent on actual inventory levels on hand at the effective date) will be paid in cash on the effective date and the balance of up to R18 million will be paid over a two-year period (“deferred acquisition consideration”). The deferred acquisition consideration will be paid, subject to certain conditions being met in relation to revenue targets, as follows: - R4 million , subject to a revenue target of R90 million being achieved within one year of the effective date; and - R14 million, subject to a revenue target of R108 million being achieved within two years of the effective date. Torre will issue an R8 million guarantee for a two-year period in relation to the deferred acquisition consideration on behalf of Torre Holdings. The acquisition consideration will be funded from Torre’s available internal cash resources. 6. CONDITIONS PRECEDENT TO THE ACQUISITION There are no outstanding conditions precedent to the Acquisition. 5. CATEGORISATION The Acquisition is classified as a Category 2 transaction for Torre in terms of the JSE Limited Listings Requirements. Johannesburg 5 July 2018 Sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) Date: 05/07/2018 04:04:00 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.