LABAT Africa Limited, the South African JSE-listed investment holding company, has concluded a subscription and buy-back agreement for the acquisition of a 100% interest in Reinhardt Transport Group (RTG) for a total consideration of R560 million.
Brian van Rooyen, CEO of Labat commented: “Labat’s strategy has been to create a value enhancing BEE transport and logistics business through a combination of organic and acquisitive growth. This ambition is being significantly advanced with the acquisition of RTG, which is a first, and important, step in the Labat strategy. I very happy that the RTG management team has agreed to remain within the Labat structure, which will ensure that the team’s significant industry experience will be retained. Their advice and direction in terms of our future core business strategy and expansion plans will be invaluable.”
This acquisition of RTG, better positions Labat as a leading logistics company providing transport infrastructure related services with operations in South Africa and across sub-Saharan Africa.
The transaction is being financed through a combination of debt and equity arrangements. Labat has secured deferred funding from a RTG vendor to the extent of R230 million, which will be used to settle a portion of the consideration.
The R330 million balance will be settled in cash by issuing up to 220 000 000 new Labat shares at 150 cents per share, of which R129 million will be subscribed for by the RTG vendors (including RTG management) and the balance of R201 million will be settled through a private share placement.
The private placement is being preferentially offered to BEE retail investors as Labat wishes to retain a strong and acceptable BEE rating post the transactions.
The acquisition of RTG by Labat is classified as a Category 1 transaction in terms of the JSE Listings Requirements. Therefore, both the acquisition and issue of shares for cash will require the approval of Labat’s shareholders at a General Meeting, scheduled to take place on 18 December 2015.
Irrevocable undertakings to vote in favour of the transaction have been received from Link Private Equity and other shareholders exercising control over the voting rights of a total of 106 529 815 shares, which currently represents 41.10% of the shares in issue.
The total number of shares in issue in Labat post the acquisition and issue of shares for cash will be approximately 509 202 297 shares. A proposal will then be made to the JSE for the listing of Labat to be transferred to the Main Board.
Labat already meets the shareholder spread requirements for the Main Board with 775 public shareholders as per the latest share register dated 25 September 2015, holding 58.9% before the acquisition of RTG and 31.8% post the transaction.
All conditions precedent, with the exception of the shareholders’ approval have been met, including approval from the Competition Commission.
“Labat also intends on acquiring the three RTG Properties for a total consideration of R74.5 million as well as a 100% interest in RTG Logistica for R500 000 during 2016,” concludes van Rooyen.
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