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Cat 2 Acq by Bowler Plastics P/L (“Bowler Plastics”) of the business &assets of Skye Plastics P/L (“Skye Plastics")
BOWLER METCALF LIMITED
Incorporated in the Republic of South Africa
Registration number 1972/005921/06
Share code: BCF ISIN: ZAE000030797
(“the Company”)
CATEGORY 2 ACQUISITION BY BOWLER PLASTICS PROPRIETARY LIMITED (“Bowler Plastics”) OF THE
BUSINESS AND ASSETS OF SKYE PLASTICS PROPRIETARY LIMITED (“Skye Plastics”)
1. Introduction
Shareholders are referred to the voluntary announcement published on SENS on 18 November 2021
(“the Voluntary Announcement”) wherein the Company advised that it had, through its wholly-
owned subsidiary, Bowler Plastics, entered into a conditional binding offer (“CBO”) with Skye Plastics
in terms of which Bowler Plastics had proposed to acquire, and Skye Plastics would sell, the business
and assets of Skye Plastics as a going concern (“the Acquisition”).
Shareholders are advised that Bowler Plastics and Skye Plastics have concluded the formal sale
agreement in respect of the Acquisition (“the Sale Agreement”), as referred to in the Voluntary
Announcement. The purchase consideration is R32 599 000, adjusted as detailed in paragraph 4
below (“the Purchase Consideration”).
Skye Plastics is the vendor and neither the entity nor its shareholders nor any of its associates are
related parties to the Company as defined in the Listings Requirements of the JSE Limited (“JSE”).
2. Description of Skye Plastics
Skye Plastics, which was established in April 1994, continues today under the same ownership and
manufactures rigid plastic packaging of the highest quality. Over the last 28 years, the
management team has successfully built and sustained a strong customer and operations team
with a step change in growth in the past three years.
3. Rationale for the Acquisition
The Acquisition will accelerate the expansion of Bowler Plastics into the medical and agricultural
packaging sectors. In addition, it provides a platform from which to serve a broader emerging
customer base with standard packaging in a changing personal care market. The acquired skills
and machine capacity can seamlessly integrate into the various Bowler Plastics operations in
support of the overall business growth strategy. It is expected that operational synergies will
enhance the profitability of the acquired business.
4. Purchase Consideration and Payment
4.1 Subject to the adjustments in terms of paragraphs 4.3 and 4.5 below, the Purchase
Consideration, which is payable in cash, will be R32 599 000.
4.2 The Purchase Consideration will be allocated as follows: R22 435 000 for all the fixed assets and
R10 164 000 (which may be adjusted in terms of paragraph 4.3 below) for the stock.
4.3 If the value of the stock at the Effective Date as defined in paragraph 9 below (“Effective
Date”), is less than R10 164 000, then the Purchase Consideration will be decreased by the
amount by which it is less, and if it is more than R10 164 000, then the Purchase Consideration
will be increased by the amount by which it is more.
4.4 The Purchase Consideration for the fixed assets and stock (as may be adjusted in terms of
paragraph 4.3 above), shall be paid on the closing date, being the 5 th business day after the
Effective Date.
4.5 Subject to the remaining provisions of this paragraph 4.5 and paragraph 4.6 below, the
Purchase Consideration may be increased by up to R5 000 000 if the Skye Business Lines
Revenue (“SBLR”), measured over any consecutive 12 month period (commencing on the
Effective Date and ending on 30 June 2023), is more than R87 000 000). The Purchase
Consideration increase will be calculated on a straight-line proportional basis for SBLR from
R87 000 000 to R110 000 000, with the maximum amount of R5 000 000 being payable should
the SBLR achieve R110 000 000 or more.
4.6 The SBLR will be in respect of revenue generated i) from existing Skye Plastics products and
moulds and ii) from new products and moulds resulting from capital expenditure allocated in
the ordinary course of business.
4.7 The Sale Agreement has been structured as a sale of an enterprise as a going concern, as
envisaged by Section 11(1)(e) of the Value Added Tax Act, 1991. This ensures that the
Acquisition will be zero-rated for VAT purposes.
5. Suspensive Conditions
All the suspensive conditions to the Acquisition, the salient ones of which were included in the
Voluntary Announcement, have been fulfilled or waived and the Acquisition is therefore
unconditional.
Approval by the Competition Commission will not be required as the Acquisition is classified as a
small merger, and no compulsory notification is therefore required.
6. Classification of the Acquisition
Since the date of the publication of the Voluntary Announcement, the Acquisition now constitutes
a Category 2 transaction in terms of the JSE Listings Requirements which does not require approval
from the Company’s shareholders.
7. Other Salient Terms and Warranties of the Sale Agreement
7.1 The employment of all Skye Plastics staff who have contracted with Bowler Plastics, will be
transferred from the Effective Date of the Acquisition (see paragraph 9 below).
7.2 Skye Plastics, its Managing Director and Operational Director will be subject to restraints of
trade which are standard for a transaction of this nature.
7.3 The Sale Agreement contains representations and warranties by Skye Plastics in favour of
Bowler Plastics which are standard for a transaction of this nature.
8. Financial Information
The value of the fixed assets and stock of Skye Plastics as at 30 June 2021 was R26 113 000.
While the audited profits after tax of Skye Plastics for the year ended 30 June 2021 was R1 989 000,
consideration has been given to the significant synergies that will come into play upon the
integration of Skye Plastics into Bowler Plastics.
The above financial information was extracted from the audited annual financial statements of
Skye Plastics for the year ended 30 June 2021 which were prepared in terms of IFRS for Small and
Medium Enterprises. The financial statements were audited by CHF & Co, without any modification
or qualification.
Bowler Plastics is satisfied with the quality of the audited financial statements from which the
financial information was extracted.
9. Effective Date of the Acquisition
The Effective Date of the Acquisition is 1 March 2022.
10. Other
The Company confirms, for purposes of paragraph 9.16 of the JSE Listings Requirements, that nothing
in the constitutional documents of Skye Plastics will, in any way, frustrate or relieve the Company from
compliance with the JSE Listings Requirements.
CAPE TOWN
2 March 2022
Sponsor
AcaciaCap Advisors Proprietary Limited
Date: 02-03-2022 05:32:00
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