TRELLIDOR HOLDINGS LIMITED - Acquisition of Really Secure Company UK Limited

Acquisition of Really Secure Company UK Limited

TRELLIDOR HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1970/015401/06)
Share code: TRL
ISIN: ZAE000209342
(“Trellidor” or “the Company”)

ACQUISITION OF REALLY SECURE COMPANY UK LIMITED

1.     INTRODUCTION

       Shareholders are advised that on 28 October 2020, the Company, through its wholly-
       owned subsidiary Trellidor UK Investments Limited (“Trellidor UK”), entered into a sale
       of shares agreement (“Agreement”) with James Francis Milburn (“Seller”) and Really
       Secure Company UK Limited (“RSC”), in terms of which the Company will purchase 100%
       of the issued share capital of RSC (“Sale Shares”) from the Seller for a maximum
       purchase consideration of £1 569 991 (“Purchase Consideration”) (“Acquisition”).

2.     DESCRIPTION OF THE BUSINESS OF RSC

       RSC operates as a Trellidor product franchisee.

3.     RATIONALE FOR THE ACQUISITION

       Given the strong brand presence and customer base that has been established over the
       more than 15 years Trellidor has been operating in the UK, RCS is key to Trellidor’s
       distribution growth strategy within the UK and potentially the rest of Europe.

4.     DUE DILIGENCE INVESTIGATION

       Trellidor has a detailed understanding and knowledge base of RSC, given that it has
       operated as a Trellidor product franchisee for 6 years. Trellidor have completed an initial
       due diligence assessment and based on this together with their knowledge base of RSC,
       Trellidor is comfortable to proceed with the Acquisition subject to a downward adjustment
       of the Purchase Consideration, which calculation will be determined based on the
       finalisation of an extended post-closing due diligence (“Post Closing Due Diligence”).

5.     PURCHASE CONSIDERATION

5.1.     The Purchase Consideration is equal to the aggregate of:

5.1.1.      £969 991, being the aggregate of the net asset value of RSC as at 30 June 2020
            less £100 000 (“First Payment”);

5.1.2.      a maximum amount £300 000, subject to a downward adjustment (“Second
            Payment”) which calculation will be determined based on the finalisation of the Post
            Closing Due Diligence; and

5.1.3.      a maximum amount of £300 000, subject to a downward adjustment to be
            determined based on the achievement of the target sales threshold for the 12-month
            period commencing 1 July 2020 and ending on 30 June 2021 (“Third Payment”)

5.2.     The First Payment will be paid to the Seller within in 10 business days of the Closing
         Date (as defined below).

5.3.     The Second Payment will be paid to the Seller by no later than 31 March 2021 or such
         later date as the Second Payment has been determined by the auditors of RSC.

5.4.     The Third Payment will be paid to the Seller by no later than 30 September 2021.

6.     CONDITIONS PRECEDENT

6.1.     The Acquisition is subject to the fulfilment of the following outstanding conditions
         precedent (“Conditions Precedent”):

6.1.1.      the board of directors of RSC has approved or ratified (as the case may be) the
            conclusion of the Agreement and has approved the transfer of the Sale Shares to
            Trellidor UK;

6.1.2.      the Seller has delivered the statutory accounts of RSC for the period ending 30 June
            2020 and the monthly management accounts of RSC in respect of the period
            commencing on 1 July 2020 and expiring on 31 August 2020, to Trellidor UK;

6.1.3.      the counterparties to the agreement for the supply of goods and services entered
            into between Sainsbury’s Supermarkets Limited and RSC on 16 September 2020,
            have consented in writing to the change in control of RSC; and

6.1.4.      Trellidor UK has not, by 30 October 2020, delivered a written notice of cancellation
            to the Seller in accordance with the terms of the Agreement.

6.2.     The Conditions Precedent are to be fulfilled by not later than 30 October 2020. If any
         of the Conditions Precedent are not fulfilled by the aforementioned date, any of the
         parties shall be entitled to give written notice in writing to the other party that unless
         the relevant Conditions Precedent is fulfilled within 30 days of the date of issue of this
         notice, the period for fulfilment or waiver of the relevant Condition Precedent will expire
         on the expiry of the 30 days period.

6.3.     If the relevant Condition Precedent is not fulfilled before the expiry of the 30 day period
         (referenced in 6.2), the Agreement will then lapse.

7.     EFFECTIVE DATE AND CLOSING DATE OF THE ACQUISITION

7.1.     The closing date of the Acquisition, being the date on which possession and effective
         control of the Sale Shares will be given to Trellidor UK, will occur on the first business
         day following the date on which the Conditions Precedent are fulfilled (“Closing Date”),
         which is anticipated to be 2 November 2020.

7.2.     Notwithstanding the Closing Date, the effective date of the Acquisition, being the date
         when all risk in and all benefit attaching to the Sale Shares will have deemed to pass
         to Trellidor UK, will be 1 July 2020, subject to the fulfilment of the Conditions Precedent.

8.     FINANCIAL INFORMATION

8.1.     The value of the net assets of RSC as at 30 June 2020, being the date of the last
         statutory accounts of RSC, was £1 069 991. The net asset value includes cash on
         hand of £561 140.
8.2.     The profits after tax attributable to RSC for the year ended 30 June 2020, was
         £214 216, based on the statutory accounts of RSC for the year ending 30 June 2020.

8.3.     Trellidor is satisfied with the quality of the statutory accounts of RSC. Shareholders are
         advised that they are unaudited.

9.     WARRANTIES AND OTHER SIGNIFICANT TERMS OF THE AGREEMENT

9.1.     The Agreement contains representations and warranties by the Seller in favour of
         Trellidor UK which are standard for a transaction of this nature.

9.2.     In terms of the Agreement, Trellidor irrevocably, unconditionally and on the basis of a
         severable and discrete obligation enforceable against Trellidor, guarantees to the
         Seller the full, prompt and complete payment of the First Payment when same
         becomes due.

10. CLASSIFICATION OF THE ACQUISITION

       The Acquisition constitutes a category 2 transaction in terms of the JSE Limited Listings
       Requirements.

11. OTHER

       The Company confirms, for purposes of paragraph 9.16 of the JSE Limited Listings
       Requirements, that nothing in the constitutional documents of RSC will, in any way,
       frustrate or relieve the Company from compliance with the JSE Limited Listings
       Requirements.

Durban
28 October 2020

Sponsor and Transaction Adviser

PSG Capital

Date: 28-10-2020 02:30:00
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