ZSE-LISTED marker and distributor of paper products, stationery and batteries, Amalgamated Regional Trading (ART) Holdings Limited, announced on Wednesday 5 May 2021 the closing of the previously announced transaction to fully acquire Softex, a business jointly owned with Nampak Zimbabwe Limited.
Softex Tissue Products specialises in the manufacturing of high-quality tissue products and distributes a wide range of hygiene care products for the industrial and consumer markets in Zimbabwe.
The transaction, reaching a total consideration of US$800,000 sees ART acquiring 1,448,500 shares in Softex currently held by Nampak, representing the 50% issued share capital of Softex not already held by ART.
A compelling strategic fit that will streamline decision making and boosts operations
The deal provides ART an opportunity to streamline the decision-making process at Softex by removing the need to consult backwards and forwards between ART and Nampak seeking to align the interests of both shareholders before major decisions.
In addition, it will simplify the capitalisation process where decisions would now be based on a single shareholder and the ability to raise the required capital. It will also allow the business to respond faster to the environment and consolidate the Paper Business Silo of Art.
According to Equity Axis’ Economic Analyst Tinashe Duma, “The acquisition will boost profits and has a positive impact on the market cap of ART as a whole.”
“For Nampak, it improves its current ratio and liquidity. This helps the business in covering all short-term obligations.”
Nampak confirmed the deal is done in a separate announcement to shareholders.
Nampak’s Managing Director, John Van Gend said, “An agreement was reached with fellow shareholders in Softex, ART Holdings Limited (“ART”) who have purchased the entire NAMPAK holding in Softex.
“Further details of the transaction will be available in the next Interim Report to the Shareholders of NAMPAK.”
The Purchase Price shall be paid in six (6) equal monthly installments with the first installment being due on or before the 30th of May 2021 and thereafter on or before the last day of each and every subsequent month with the last installment being due on the 30th of October 2021.
“All payments to be made under this transaction shall be made in United States Dollars by electronic transfer of immediately available funds to Nampak Zimbabwe Limited,” said ART.
“Nampak as the Seller has given warranties and indemnities that are standard for a transaction of this nature.”
ART’s business units include Chloride Zimbabwe, Chloride Zambia, Exide Express, Eversharp, Kadoma Paper Mills, National Waste Collection, Softex and Mutare Estates.
Equity Axis News