Acquisition of 100% of the issued share capital of Deep Catch Namibia Holdings (Proprietary) Limited
Imperial Logistics Limited
(Incorporated in the Republic of South Africa)
Registration number 1946/021048/06
JSE share code: IPL
(“Imperial” or “Company” or “Group”)
ACQUISITION OF 100% OF THE ISSUED SHARE CAPITAL OF DEEP CATCH NAMIBIA HOLDINGS
Imperial is pleased to advise that on 16 June 2021 it has, through its wholly-owned subsidiary,
Imperial Capital Limited (“the Purchaser”), entered into an agreement ("Agreement") to acquire
100% of the issued share capital of Deep Catch Namibia Holdings (Proprietary) Limited ("Deep
Catch") (“the Sale Shares”) from its shareholders, Salt Capital Ventures Limited (“Salt Capital”) and
DEG - Deutsche Investitions - und Entwicklungsgesellschaft mbH (those shareholders hereinafter
referred to as the “Investor Shareholders”) and Christoph Kubirske, Jared-Dwight Geyser and
Lewton Geyser (those shareholders hereinafter referred to as the “Management Shareholders”)
(collectively, “the Sellers") (“the Transaction”).
2. DESCRIPTION OF DEEP CATCH
Deep Catch is a diversified and vertically integrated business engaged in the wholesale,
distribution and cold storage of perishable foods (mainly poultry, fish and dairy products) in
Namibia and the SADC region. Headquartered in Namibia and with subsidiaries in Namibia, South
Africa, Zimbabwe and Zambia, Deep Catch employs over 480 people and serves customers in the
wholesale, hospitality and retail sectors – including exporting Namibian and South African food
products to other SADC markets.
Deep Catch has three commercial cold storage warehouses located in Namibia and South Africa.
Its distribution business has physical presence in SADC countries with over 50 multi-temperature
delivery vehicles. The business also owns a majority stake in one of the largest freight forwarding
businesses in Namibia.
3. RATIONALE FOR THE TRANSACTION
The Transaction is in line with Imperial’s ‘Gateway to Africa’ strategy and provides Imperial with
the opportunity to increase its reach into the consumer market and expand its footprint with new
capabilities on the African continent.
Through the expansive cold chain capability and extensive network acquired through Deep Catch,
Imperial’s Market Access business will be positioned to enter and build onto its cold chain
capability and product category expansion in its existing markets of operation in Sub-Saharan
Africa (mainly South Africa, Mozambique, Ghana and Nigeria), where there is substantial demand
for affordable protein products. This acquisition will provide access to defensive, value-added
capabilities in FMCG, such as re-packaging.
In addition, and in line with Imperial’s strategy to leverage cross-selling opportunities across its
businesses in Africa, the acquisition of Deep Catch, through expansion into the cold chain
capability, will also provide opportunity to expand Imperial’s reach to new customers and
principals in other markets of operation.
4. PURCHASE CONSIDERATION
4.1. Assuming that Deep Catch achieves its earnings before interest, taxes, depreciation, and
amortisation (“EBITDA”) targets in respect of FY2021 through FY2024, the agreed purchase
consideration (calculated on the basis of a "locked box" structure) is N$633 million (ZAR633
million) (increased by an interest factor equal to the Bank of Namibia’s repo rate plus 50
basis points reckoned from 1 July 2020 to the date of payment) (“the Purchase
Consideration”) plus, if applicable, the amount referred to in paragraph 4.2 below. The
Purchase Consideration is payable as follows:
4.1.1. on the Completion Date (which is the second business day following the date on which
the last of the conditions precedent as set out in paragraph 5 below is fulfilled), N$341,7
million shall be paid to the Sellers;
4.1.2. on the finalisation of the audited annual financial statements of Deep Catch in respect of
FY2021, a maximum amount of N$128,4 million shall be paid to the Sellers, subject to a
downward adjustment if Deep Catch does not achieve its target EBITDA of N$129 million;
4.1.3. an amount of N$162,9 million shall be paid to the Management Shareholders in three
equal tranches on the finalisation of the audited annual financial statements of Deep
Catch in respect of FY2022, FY2023 and FY2024 respectively (“the Management Deferred
Consideration”), based on Deep Catch’s performance during the relevant year concerned
• if the target EBITDA for the year concerned is not met but the actual EBITDA is equal
to or greater than 90% of the target EBITDA, the Management Shareholders shall
receive 80% of the payment due for that year; and
• if the actual EBITDA for the year concerned is less than 90% of the target EBITDA, the
Management Shareholders shall receive 50% of the payment for that year.
4.2. The final determination of the Management Deferred Consideration shall be based on the
average EBITDA achieved over FY2022, FY2023 and FY2024 providing the Management
Shareholders an opportunity, at the end of FY2024, to recoup any amount not earned by
them in any of the target years FY2022, FY2023 and/or FY2024.
4.3. In addition to the Purchase Consideration referred to in paragraph 4.1 above, the
Management Shareholders shall be entitled to an earn-out payment equal to a maximum of
N$40,7 million, to the extent that the actual cumulative EBITDA for FY2022, FY2023 and
FY2024 achieved by Deep Catch, exceeds the target cumulative EBITDA for that period.
5. CONDITIONS PRECEDENT
The Transaction is subject to the fulfilment of the following suspensive conditions ("Conditions
5.1. the submission of merger filings to the South African, Namibian and COMESA Competition
Authorities and approval by the South African and Namibian Authorities of the Transaction;
5.2. the consent of the existing funders of Deep Catch to the Transaction and the counterparties
to certain material contracts;
5.3. the consent and waivers of pre-emptive rights from the shareholders of Camel Thorn Freight
Forwarding Proprietary Limited and Seapride Zimbabwe Proprietary Limited pursuant to the
5.4. the conclusion of 3-year service agreements including restraints between the Management
Shareholders, key managers and Deep Catch; and
5.5. Imperial confirming that no material adverse event has occurred within ten business days of
the fulfilment of all the other Conditions Precedent.
6. COMPLETION DATE OF THE TRANSACTION
The Transaction will be implemented on the Completion Date, whereupon ownership of the Sale
Shares shall pass to the Purchaser.
7. FINANCIAL INFORMATION
The value of the net assets of Deep Catch as at 30 June 2020, being the date of the last audited
annual financial statements, was N$287,6 million.
The revenue, EBITDA and profit after tax attributable to the net assets for the year ended 30 June
2020, were N$1 035,8 million, N$100,8 million, and N$21,9 million respectively, based on the
audited annual financial statements of Deep Catch for the year ended 30 June 2020, which were
prepared in terms of International Financial Reporting Standards for Small and Medium-sized
8. WARRANTIES AND OTHER SIGNIFICANT TERMS OF THE AGREEMENT
The Agreement contains representations and warranties by the Sellers in favour of the Company
which are standard for a transaction of this nature.
9. CLASSIFICATION OF THE TRANSACTION AND EXCHANGE RATE
The Transaction constitutes a category 2 transaction in terms of the JSE Limited Listings
Requirements. The exchange rate of N$1/ZAR1 was utilised in respect of the Transaction and
accordingly all Namibian Dollar amounts herein are reflective of the corresponding Rand (ZAR)
The Company confirms, for purposes of paragraph 9.16 of the JSE Limited Listings Requirements,
that nothing in the constitutional documents of Deep Catch and/or Imperial Capital Limited will,
in any way, frustrate or relieve the Company from compliance with the JSE Limited Listings
Imperial Investor Relations
17 June 2021
Sponsor to Imperial
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Legal Adviser to Imperial
TWB – Tugendhaft Wapnick Banchetti & Partners
Legal Adviser to Deep Catch
Financial Adviser to Deep Catch
Investec Bank Limited
Date: 17-06-2021 07:05:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.