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Voluntary announcement regarding the sale of non-core assets by Tiger Brands
TIGER BRANDS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1944/017881/06)
Share code: TBS
ISIN: ZAE000071080
("Tiger Brands" or the "Company")
VOLUNTARY ANNOUNCEMENT REGARDING THE SALE OF NON-CORE ASSETS BY
TIGER BRANDS
1. INTRODUCTION
In line with our portfolio optimisation strategy, shareholders
are advised that Tiger Brands has through its wholly owned
subsidiary, Tiger Consumer Brands Limited ("Tiger Consumer
Brands") entered into a sale of business agreement (the "SBA")
for the disposal of its Baby wellbeing business ("Wellbeing
Business"), as a going concern, to an unrelated third-party
purchaser (the "Purchaser") (the "Transaction"). In addition
to the Transaction, Tiger Consumer Brands, Tiger Food Brands
Intellectual Property Holding Company Proprietary Limited and
the Purchaser entered into a sale of assets agreement (the
"SOA") to dispose of certain non-core brands within the Home
and Personal Care business unit as aligned with Tiger Brands'
ambition of creating a focused portfolio.
2. THE TRANSACTION
a. Rationale for the Transaction
Our portfolio optimisation strategy is underpinned by
ensuring Tiger Brands focuses and deploys capital in the
areas within which the Company has a right to win. After
undergoing an extensive portfolio review to identify
business units and categories for which there was no
longer a financial or strategic fit, the Wellbeing
Business was identified for disposal.
The Company then implemented an extensive process to
assess interest from a range of local and international
parties, which culminated in the Transaction.
b. Salient Terms of the Transaction
The Purchaser will acquire the Wellbeing Business as a
going concern, for a total cash consideration of R605
million (six hundred and five million Rand) ("Wellbeing
Purchase Price") which will be payable on the effective
date of the Transaction ("Wellbeing Effective Date").
In addition, the Purchaser will acquire all the
inventories relating to the Wellbeing Business located
at the Home and Personal Care manufacturing facility in
Isando and at various third-party manufacturers' sites,
on the Wellbeing Effective Date. The values of the
inventories forming part of the sale shall be determined
upon conclusion of the inventories stock take expected
to be performed within 2 (two) business days of the
Wellbeing Effective Date, as contemplated in the SBA.
The aggregate consideration for the inventories is
expected to be approximately R25 million (twenty five
million Rand).
c. Conditions Precedent
The SBA is subject to suspensive conditions that are
customary for a transaction of this nature, including,
without limitation, the fulfilment of the following
suspensive conditions:
• Tiger Consumer Brands securing the written consent
of the counterparties to –
o the transfer and assignment (to the extent
required) to the Purchaser of third-party
manufacturing contracts relating to toiletries
and/or medicinal products that are manufactured by
third parties (or the entry into of new agreements
with the Purchaser, where applicable);
o the granting of a sub-licence agreement relevant
to the Vi-Daylin products to the Purchaser;
• Tiger Consumer Brands and the Purchaser obtaining the
required approvals from the relevant Competition
Authorities, including in South Africa in relation
to the Transaction, which approval shall be
unconditional or subject to such conditions as Tiger
Consumer Brands and the Purchaser may reasonably
accept; and
• Tiger Consumer Brands and the Purchaser entering into
a transitional services agreement.
d. Baby Wellbeing disclosure at 30 September 2024
Baby Wellbeing is disclosed as held for sale as at 30
September 2024.
3. OVERVIEW OF WELLBEING BUSINESS AND THE PURCHASER
The Wellbeing Business forms part of the Baby Unit within
the Home, Personal Care and Baby business, itself a
division of Tiger Consumer Brands. For clarity, the
Wellbeing Business forming part of the Transaction
comprises baby toiletries and medicinal products but does
not include the Baby Nutrition business, which remains a
core category for Tiger Brands. As part of the Transaction,
the Purchaser will acquire all trademarks and related
intellectual property rights associated with the toiletries
and medicinal products brands, namely Elizabeth Anne's,
Phipps, Muthi Wenyoni, Telament and Antipeol, as well as
the right to manufacture and sell Vi-Daylin under a sub-
licence. As the Purity Brand is core to the Baby Nutrition
business but its use overlaps within the baby toiletries
segment, Tiger Consumer Brands will grant and extend to the
Purchaser a limited license to enable the Purchaser to
transition and migrate use of the Purity Brand in relation
to baby toiletries to Elizabeth Anne's over an agreed
period of time.
The Purchaser is one of the leading South African
manufacturers of home and personal care products servicing
the FMCG markets in a number of countries. This Transaction
will further strengthen their portfolio and footprint
beyond South Africa.
4. SALE OF OTHER NON-CORE BRANDS TO THE PURCHASER
Tiger Consumer Brands and the Purchaser concluded the SOA
relating to a select list of non-core brands within the
Home and Personal Care business (namely BioClassic,
BioCrystal, Kair, Black Silk, Fiesta and Eulactol) with
effect from 30 September 2024. The transaction entailed the
sale of trademarks and related intellectual property rights
associated with the aforementioned referenced products, for
a total cash consideration of R135 million (one hundred and
thirty five million Rand). The aggregate consideration for
the inventories is expected to be approximately R25 million
(twenty five million Rand).
The conclusion of the above transactions marks another milestone
in the simplification of the Company's portfolio and will enable
management to intensify focus on the core business in the Home,
Personal Care and Baby Nutrition division, where we believe we
have a clear competitive advantage. Management remains committed
to further refining the business through targeted disposals
where these businesses are deemed non-core.
20 November 2024
Bryanston
Sponsor: J.P. Morgan Equities South Africa Proprietary Limited
Financial advisor: Rand Merchant Bank, a division of FirstRand
Bank Limited
Legal advisor: Edward Nathan Sonnenbergs Inc.
Date: 20-11-2024 01:30:00
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