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Super Group to acquire a 75% interest in German logistics group, IN tIME; and announces a proposed rights offer of up to R900 million

Jul 13 2015

Super Group is pleased to announce that it has concluded an agreement whereby it will acquire a 75% interest in the share capital of Telo Zwei Vermögensverwaltung GmbH (“Telo Zwei”), the holding company owning 100% of IN tIME Holding GmbH (“IN tIME”), from certain funds managed by Equistone Partners Europe Limited for a total enterprise valuation of €153.5 million (R2.1 billion).

Super Group has further announced that it proposes a fully underwritten rights offer of up to R900 million to assist with the funding of the acquisition. Super Group has entered into an underwriting agreement with Investec Bank Limited in respect of the proposed rights offer, up to a value of R1.1 billion.

IN tIME, headquartered in Germany with 20 operating branches across Germany, Sweden, Hungary, Romania, the Czech Republic and Poland, operates in the niche logistics sector of time-critical delivery services, across 18 countries in Europe, servicing the automotive, electronics, hazardous goods, life sciences, pharmaceutical, temperature controlled, emergency blood and medical service industries. IN tIME has developed proprietary dispatching software which optimises transport capacity utilisation in order to provide point-to-point services.

Peter Mountford, CEO of Super Group, commented: “We are excited to have concluded the acquisition of IN tIME at a reasonable 8.7 times EBITDA multiple, based on the actual earnings of IN tIME for the year ended 31 December 2014. The effective return on equity, including shareholder loans, is 11.9%, based on a historical Price Earnings multiple of 8.4 times. The acquisition provides an excellent fit and falls directly within the core strategy to expand the Group’s Supply Chain activities in industry niches where we have extensive experience such as the automotive and industrial parts industries. The acquisition further expands Super Group’s geographical footprint and gives us access to the state-of-the-art proprietary dispatching software developed by IN tIME.”

The investment in IN tIME will be held via Bluefin Investments, a wholly-owned subsidiary of Super Group, which is registered in Mauritius. The remaining 25% interest in the shares of Telo Zwei continues to be held by the management team of IN tIME, alongside Super Group’s proposed 75% interest.

The total purchase consideration payable for the acquisition of €153.5 million (R2.1 billion) will be funded by a €79.2 million (R1.1 billion) cash contribution from Super Group comprising €48.9 million (R685 million) for the 75% equity interest and a €30.3 million (R424 million) shareholder loan. Super Group has already entered into binding debt facilities (term loans) with three European banks to the amount of €58.0 million (R812 million). The management of IN tIME will make a €16.3 million (R228 million) equity contribution for their 25% interest via the contribution of their shares in Telo Zwei.

Mountford concluded: “We are confident that the acquisition of the 75% interest in IN tIME heralds an exciting phase in Super Group’s journey and we believe that the management team of IN tIME, with their extensive knowledge and experience, will be able to add extensive value to our Supply Chain Division. We are expecting this acquisition to be earnings enhancing for the financial year ending 30 June 2016.”