LABAT AFRICA LIMITED - Acquisition of 75.55% of Classic International Trading Proprietary Limited.

Acquisition of 75.55% of Classic International Trading Proprietary Limited.

 LABAT AFRICA LIMITED
 (Incorporated in the Republic of South Africa)
 (Registration number 1986/001616/06)
 ("Labat Africa" or "the Company")
 ISIN Code: ZAE000018354 Share Code: LAB
 FSE Code: LEI 9845000R73DF5EE41J88


ACQUISITION OF 75.55% OF CLASSIC INTERNATIONAL TRADING PROPRIETARY LIMITED ("CLASSIC")


BACKGROUND AND TERMS

In terms of Asset for Shares Agreement, Labat Africa will acquire 75.55% interest in Classic from
the current Shareholder of Classic for a consideration of R16.275 million to be settled through
the issue of 232.5 million ordinary Labat Africa shares at an issue price of R0.07 per share which
is on par with the pre suspension share price of 0.07 cents per share. As part of the acquisition
Classic undertakes to underwrite the actual and contingent liabilities of Labat on effective date.

RATIONALE

The acquisition represents a significant step for Labat Technology, which has been actively
seeking opportunities to diversify and strengthen its portfolio. This division has faced
considerable challenges, necessitating a pivot toward the IT and technology sector. This
transaction offers Labat several key advantages:

   •   Entry into IT Market: Classic International's expertise provides Labat with a direct pathway
       into the competitive IT space.
   •   Expansion Potential: Classic International's profitable track record enables rapid
       expansion, ensuring sustainable growth for Labat's technology business.
   •   Ethical and Future-Focused Technology: Labat benefits from the alignment with Classic
       International's ethical technology principles, positioning it favorably in the evolving tech
       landscape.

SUSPENSIVE CONDITIONS OF THE ACQUISITION

The Classic Acquisition is subject to the following suspensive conditions:
   1. Submission of the audited financial statements of Labat for the financial years ended 31
       May 2023 and 2024 to the JSE by 30 November 2024.
   2. Lifting of the suspension of trading in shares of Labat on the JSE.

FINANCIAL INFORMATION

Per the Annual Financial Statement of Classic for the year ended 28 February 2024 the company
made a profit before taxation amounting to R8.9 million for the year. Per the management
accounts for the period ended 31 October 2024, Classic's profit before taxation amounted to
R11.0 million for the 8-month period and the net asset value was reflected as R19.9 million.
Classic's profit before taxation projection for next three financial years is approximately R70
million per year which will translate into an EPS of 0.06 cents per share. Classic has provided a
profit warranty related to the 2025 financial years.

CLASSIFICATION OF THE TRANSACTION

The acquisition of the Classic shares is a Category 2 transaction for Labat Africa and Classic is
not a related party to Labat Africa as defined in the JSE Listings Requirements. Accordingly, a
fairness opinion and shareholder approval is not required.


JOHANNESBURG
20 November 2024

Sponsor
Vunani Sponsor

Date: 20-11-2024 04:57:00
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.