Business mogul Brian Joffe’s new investment holding company, Long4Life, which recently debuted on the JSE, has announced its intention to acquire local cash retailer Holdsport, which trades as Sportsmans Warehouse and Outdoor Warehouse.
With Long4Life’s offer being implemented by way of a scheme of arrangement, Holdsport shareholders can receive 12.10 ordinary shares in Long4Life for each Holdsport share held, or they can receive 11.20 Long4Life shares and R5 in cash for each Holdsport share, subject to a maximum aggregate cash consideration of R204-million. The total cash to be paid out will not exceed this amount and will be funded by Long4Life using its existing cash resources.
The Bidvest and Bidcorp founder described this as a pivotal acquisition for Long4Life as it aligns with the company’s stated investment criteria.
“Holdsport not only adds significantly to the intrinsic value of Long4Life, as well as our overall gearing capacity, but [it will also] prove to be key in establishing and building the Long4Life investment platform in the lifestyle sector,” Joffe said in a statement.
He added: “This acquisition provides Long4Life [with] an entry into the exciting sport and outdoor markets, which we believe have tremendous future growth potential.”
Joffe believes the offer is a compelling proposition for Holdsport shareholders too, as it will help them realise value for their current shareholding and provide them with the opportunity to participate in Long4Life’s growth opportunity.
“This transaction will provide Holdsport with access to Long4Life’s strong balance sheet, providing appetite and capacity to grow both acquisitively and organically, [enabling] the company access to our management team’s proven deal-making expertise,” said Joffe.
Once all the conditions precedent to the transaction are met, Holdsport’s JSE listing will be terminated and it will become a wholly owned subsidiary of Long4Life.
The scheme of arrangement is subject to the normal conditions precedent for a transaction of this nature, including the necessary regulatory approvals and/or consents from the JSE, the Takeover Regulation Panel, and the South African Competition Authorities. It is also conditional on Holdsport and Long4Life shareholder resolution approvals.
The transaction is expected to close in the third quarter of 2017.