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Category 2 Transaction Announcement Regarding The Acquisition Of Rondebosch Medical Centre Proprietary Limited
RH BOPHELO LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2016/533398/06)
(JSE Share Code: RHB, ISIN: ZAE000244737)
(“RH Bophelo” or the “Company”)
CATEGORY 2 TRANSACTION ANNOUNCEMENT REGARDING THE ACQUISITION OF THE
REMAINING 70% OF THE EQUITY AND ALL CLAIMS ON THE SHAREHOLDER’S LOAN
ACCOUNT IN RONDEBOSCH MEDICAL CENTRE PROPRIETARY LIMITED
1. INTRODUCTION
RH Bophelo is pleased to announce that on 25 March 2020, it entered into a Sale of Shares and
Claims Agreement (the “Agreement”) through its wholly-owned subsidiary, RH Bophelo Operating
Company Proprietary Limited (“RH Bophelo Opco” or the “Purchaser”), in terms of which, upon
the fulfilment or waiver (as the case may be) of the conditions precedent in the Agreement by not
later than 1 April 2020, RH Bophelo Opco will:
. acquire the remaining 70% of the entire issued share capital in Rondebosch Medical Centre
Proprietary Limited (“RMC”) from the existing vendors, namely Perthpark Properties
Proprietary Limited (“Perthpark”), MSR Investments Proprietary Limited (“MSR”), Leslie
Ramages Family Trust, Mohamed Ismail Shreef Trust, Nisar Ahamed Moosa, Riaad Moosa
and Junaid Moosa (collectively the “Sellers”); and
. acquire all claims on loan account owing to the Sellers by RMC (the “Claims”),
(collectively the “Acquisition”). RMC will become a wholly owned subsidiary of RH Bophelo Opco,
and hence RH Bophelo.
2. INFORMATION ON RMC
RMC is an acute 123 bed (with the capacity and potential to reach above 200 beds) independent
private hospital conveniently located on Klipfontein Road, opposite the Red Cross Children’s
Hospital in Rondebosch, Cape Town. RMC was officially established in 2011 after converting an
existing 27 bed and 4 theatre day hospital license into an acute license and moving the longstanding
practice, which was originally established and has been operating since the late 1980s, to
Rondebosch. RMC has grown incrementally with limited capital and the founders have successfully
applied to the Department of Health for an increase in beds over the years.
RMC currently offers the following services:
. Major theatres: 4
. Delivery rooms: 3
. Endoscopy suite: 1
. General medical and surgical unit: 62 beds
. Paediatric unit: 16 beds
. Paediatric ICU unit: 3 beds
. Maternity unit: 10 beds
. Intensive care unit: 8 beds
. Neonatal intensive care unit: 5 beds
. High care unit: 4 beds
. Sub-acute unit: 10 beds
. Emergency unit: 5 beds
3. RATIONALE FOR THE ACQUISITION
RH Bophelo acquired an initial 30% stake in RMC in 2018 and the conclusion of the Acquisition
represents RH Bophelo’s conclusion of its intended strategy to acquire 100% of RMC. The
Acquisition remains a strategic opportunity for RH Bophelo to invest in a 123 bed acute urban
hospital, servicing a strategic region in Cape Town’s metropolis. Furthermore, the Acquisition
provides RH Bophelo with, inter alia, the following:
. Quick access into the Cape Town metropolis, which is generally prohibitive due to its cost of
entry;
. Entry into a growing market at an attractive price per bed;
. RMC is well positioned to cater for a wide array of income groups, including those from
previously disadvantaged population;
. RMC represents a facility and has doctors who are trusted in the community ensuring a loyal
patient base;
. RMC will serve as RH Bophelo’s launch pad into the greater Cape Town community; and
. The capacity and potential to establish new units and increase from 123 beds to above 200
beds present an upside for RHB.
4. SALIENT TERMS OF THE ACQUISITION
Subscription by RH Bophelo Opco
RH Bophelo (through RH Bophelo Opco) will acquire 70% of the entire issued share capital in RMC
as well as the Claims from the Sellers for a total consideration of R93.75 million (the “Purchase
Price”) as follows:
Part A Sale
. R15.0 million in cash payable within 5 business days from the date of fulfilment of the last of
the conditions precedent (“Part A Closing Date”); and
. R21.46 million to be settled through the issue of 2 178 626 RH Bophelo shares issued at
R9.85 per share, which shares will be issued simultaneously with payment of the cash portion
on the Part A Closing Date.
Part B Sale
. R53.54 million plus R3.75 million (“Premium”) to be paid in cash or RH Bophelo shares at
R9.85 per share at RH Bophelo’s election by no later than 31 July 2020 (“Part B Closing
Date”).
The remaining 70% of the entire issued share capital in RMC will vest in RH Bophelo Opco on the
Part A Closing Date.
The Agreement contains warranties which are standard for a transaction of this nature.
5. CONDITIONS PRECEDENT
The remaining condition precedent in terms of the Acquisition which is to be fulfilled or waived (as
the case may be) by no later than 1 April 2020 (or such later date as the parties may agree to in
writing), is as follows:
. all such resolutions as may be necessary in order to approve and implement the provisions
of the Agreement have been passed by the shareholders and/or directors of RH Bophelo,
in particular, the authority to place shares under the control of the directors to issue shares
as part of the Purchase Price, to be obtained at the upcoming annual general meeting.
6. EFFECTIVE DATE
The effective date of the transaction is expected to be the 5th business day from the date of
fulfilment of the last of the conditions precedent.
7. SUBSIDIARY
The Acquisition will result in RMC becoming a subsidiary of RH Bophelo Opco, and hence RH
Bophelo. The terms of RMC’s memorandum of incorporation do not in any way influence or relieve
RH Bophelo’s compliance with its obligations in terms of the JSE Listings Requirements.
8. FINANCIAL INFORMATION
The latest unaudited management accounts for the six month ending 31 August 2019, which have
been prepared in terms of IFRS and the quality of which RH Bophelo is satisfied, showed that RMC
had a net asset value of R56.0 million and a net profit after tax of R721 thousand as at 31 August
2019.
9. CATEGORISATION
The Acquisition qualifies as a Category 2 transaction in terms Section 15 (Investment Entities) of
the JSE Listings Requirements and does not require shareholder approval.
Johannesburg
26 March 2020
Sponsor: Deloitte & Touche Sponsor Services Proprietary Limited
Attorneys: Motsoeneng Bill Attorneys (MBA)
Date: 26-03-2020 12:25:00
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