INVICTA HOLDINGS LIMITED - Acquisition of the KMP Holdings group of companies

Acquisition of the KMP Holdings group of companies

Invicta Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1966/002182/06)
Ordinary Share code: IVT Ordinary Share ISIN ZAE000029773
Preference Share code: IVTP Preference Share ISIN: ZAE000173399
(“Invicta” or the “Company”)

ACQUISITION OF THE KMP HOLDINGS GROUP OF COMPANIES

1. INTRODUCTION

    Invicta is pleased to advise that on 01 January 2022 (“Completion Date”), the Company and its subsidiary,
    Invicta Global PLC (“IVTG”), entered into an agreement (the “Agreement”) with International Holdings and
    Investments SA and Mr. Chen Chin Linn (collectively, the “Sellers”) to purchase all of the share capital of KMP
    Holdings Limited (“KMP”). In terms of the Agreement, IVTG has acquired 100% of the issued share capital of
    and shareholders loans payable by KMP from the Sellers (“the Acquisition”).

2. DESCRIPTION OF KMP

    KMP is a leading independent supplier of aftermarket heavy-duty diesel engine parts for industrial and
    agricultural machinery. KMP’s main distribution facilities are located in Chertsey (UK) as well as Houston and
    Miami (USA). KMP was established more than 20 years ago and has a global customer base actively selling
    in more than 150 countries worldwide. KMP-branded products include aftermarket parts sourced from over
    300 regular suppliers which are suitable for Komatsu®, Caterpillar®, Cummins®, Perkins®, Detroit Diesel®
    and John Deere® engines. KMP has been a specialist provider of diesel engine spare parts suitable for
    Komatsu® since 1994, Caterpillar® since 1996, Cummins® since 1994 and Perkins® since 2014.

    KMP-branded parts are widely recognised in the global aftermarket industry for their high quality, reliability and
    value.

3. RATIONALE FOR THE ACQUISITION

    Part of Invicta’s strategic focus is to diversify into new geographical areas in the industries and markets in
    which Invicta has significant experience and strong management capabilities. As such, KMP fits this profile.
    The Invicta subsidiary, Equipment Spare Parts Africa (Pty) Ltd, is a major customer of KMP and, as such, the
    Acquisition will provide cross training and skilling opportunities, as well as potential economies of scale.

4. PURCHASE CONSIDERATION

    The purchase consideration for the Acquisition is GBP12,500,000 or an equivalent R269,396,552 based on a
    ZAR/GBP exchange rate of 1:0.0464 as at 31 December 2021 (“Purchase Consideration”). The Purchase
    Consideration will be adjusted on the basis of a GBP1 up or downward adjustment for every GBP1 difference
    between KMP’s net asset value and the amount of GBP10,000,000.00 on the Completion Date.

    The Purchase Consideration will be discharged as follows:

    4.1     GBP10,000,000.00 (ten million GBP) on the Completion Date;
    4.2     GBP2,000,000 (two million GBP), within 45 (forty-five) calendar days from the Completion Date; and
    4.3     a maximum of GPB500,000 (five hundred thousand GBP) will be used for the upward or downward
            adjustment of the Purchase Consideration based on KMP’s net asset value relative to
            GBP10,000,000.00 (ten million GBP) at the Completion Date as described above.

5. CONDITIONS PRECEDENT

    There are no conditions precedent applicable for the Acquisition as the Acquisition became effective on the
    Completion Date.

6. IMPLEMENTATION DATE OF THE ACQUISITION

    The Acquisition was implemented on the Completion Date.

7. FINANCIAL INFORMATION

    The value of the net assets and the profits attributable to the net assets that are the subject of the Acquisition
    are as follows:

    7.1     consolidated net profit of GBP1,164,847 for the period 1 January 2020 to 31 December 2020; and
    7.2     net asset value of GPB10,081,662 million at 31 December 2020.

    The financial information has been extracted from the audited consolidated annual financial statements of the
    KMP Holdings Limited Group, which were prepared in terms of Financial Reporting Standard 102, the financial
    reporting standard in the UK and the Republic of Ireland (United Kingdom Generally Acceptable Accounting
    Standards).

8. WARRANTIES AND OTHER SIGNIFICANT TERMS OF THE AGREEMENT

    The Agreement contains further representations and warranties by the Sellers in favour of IVTG which are
    customary for a transaction of this nature.

9. CLASSIFICATION OF THE ACQUISITION

    The Acquisition constitutes a category 2 transaction in terms of the JSE Limited Listings Requirements.

Johannesburg
03 January 2022

Acting Company Secretary:
R Cloete, on behalf of Acorim

Transaction Sponsor:
Nedbank Corporate and Investment Banking, a division of Nedbank Limited

Date: 03-01-2022 08:00:00
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