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Super Group announces the acquisition of Allen Ford

Oct 10 2014

Introduction and overview of the Acquisition

Super Group has concluded an agreement with:

  • David Hammond, Paul Dunkley and Sir Geoffrey Whalen to acquire 100% of the shares of CHA (2005) Limited. CHA (2005) Limited, holds 100% of the shares in Charles H. Allen Limited (CHA), which in turn holds 78,28% of the shares of Allen Ford (UK) Limited Allen Ford); and
  • Derek Brook, Michael Philips, Ronald Joseph, Paula Wood, Andrew Axon and Michael Ball (collectively The Management of Allen Ford) for the remaining 21,72% of the shares of Allen Ford not owned by CHA (the Allen Ford Acquisition).

The purchaser is Super Group (UK Investments) Limited, a wholly owned subsidiary of Bluefin Investments Limited, a Super Group Company. Both Super Group (UK Investments) Limited and Bluefin Investments Limited are registered in Mauritius.

Super Group has concluded an agreement with Camden Ventures Limited and Camden Motors (Holding) Limited (Camden Companies) giving Super Group a call option to purchase eight strategic freehold or leasehold properties leased by Allen Ford from the Camden Companies (the Properties Acquisition). Should Super Group exercise the call option on any of the properties, the purchaser will be one of Super Group (UK Investments) Limited, Allen Ford or a Super Group subsidiary company to be formed in the UK. The Allen Ford Acquisition and the Properties Acquisition constitutes the Transaction.

Consideration

Note: the exchange rate used in this document is GBP1 = ZAR17,8760.

  • The purchase price for the Allen Ford Acquisition is GBP33,9 million (ZAR606,0 million), of which GBP23,8 million (ZAR425,4 million) will be financed by a Mauritian based financial institution. Super Group will settle the balance of GBP10,1 million (ZAR180,5 million) plus costs of the Allen Ford Acquisition from cash resources.
  • The purchase price of the Properties Acquisition, assuming that the sale option is exercised in respect of all eight of the properties, is GBP18,4 million (ZAR328,9 million), of which between 60% and 70% will be financed by a UK based financial institution. Super Group will settle the balance plus costs of the Properties Acquisition from cash resources.
Net assets acquired and profits attributable to those assets
  • The net asset value of the Allen Ford Acquisition will be approximately GBP9,5 million (ZAR169,8 million). The profit after taxation associated with these assets is GBP5,4 million (ZAR96,5 million).
  • The value of the Properties Acquisition as determined by a professional valuer in September 2014 is GBP19,8 (ZAR353,9 million). The profit after taxation associated with the properties is GBP0,15 million (ZAR2,7 million).
Rationale for the Transaction

Super Group’s strategy over the past five years has been to make selective acquisitions in its core businesses namely Supply Chain, Fleet Management and Dealerships in South Africa and internationally. The acquisition of Allen Ford is in line with this strategy and represents an opportunity for the Group to build a dealership business in the third largest car market in the world. The Group has had a policy of owning dealership properties in strategic locations in South Africa. The purchase of the properties in the UK is in line with this policy.

Conditions precedent

The transaction remains subject to the following conditions precedent:

  • Approval by the South African Reserve Bank of the Transaction.
  • Approval by the Financial Control Authority in the UK of the Transaction.
Effective date

The effective date of the Allen Ford Acquisition is subject to the conditions precedent being met and is expected to be around 1 December 2014. The Properties Acquisition is expected to be completed shortly thereafter.