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Adcock to sell stake to empowerment partners for R1.3 billion
November 24, 2009
By SLINDILE KHANYILE
Adcock Ingram will sell 13 percent of its shareholding to black economic empowerment (BEE) partners for R1.3 billion, the pharmaceutical firm said on Tuesday.
The BEE transaction will be concluded in March next year provided all the regulatory requirements have been met.
The preferred partners are Kagiso Health Consortium, Kurisani Youth Development Trust and Adcock’s permanent black employees.
Kagiso Health Consortium will hold 7.15 percent of the shares while Kurisani will own 2.60 percent and the employees will have 3.25 percent.
The deal will be funded through cash contributions from the partners and vendor financing which will have a 9.5 percent fixed notional vendor financing rate.
The empowerment partners will contribute R93.7 million upfront.
The term of the transaction will be 10 years and for the first seven years, the BEE partners will be locked and will not be entitled to trade their Adcock shares.
Thereafter for an additional three-year period, the partners will only be entitled to sell their shares to BEE parties that have at least the same or better black ownership status as defined in the codes.
Kagiso Health Consortium is owned by Kagiso Trust Investments (KTI) which owns 85.7 percent and Mookodi Technologies which has a 14.3 percent stake.
KTI is an empowerment business grouping formed in 1993 by Kagiso Trust as a vehicle to generate long-term sustainable financial support for the Trust.
Kagiso Trust is a non-governmental organisation established 23 years ago by Archbishop Desmond Tutu and the late Beyers Naude and other clergy of the South African Council of Churches to finance and manage community development grass roots projects.
Mookodi is a 100 percent black-owned firm formed 10 years ago that focuses on emerging business opportunities in the health care industry.
Kurisani is the investment arm of Lovelife which drives the national HIV/Aids prevention campaign for young people.
Meanwhile Adcock also announced its first full-year results since it was unbundled out of Tiger Brands.
In the year ended September, revenue increased 21 percent to R4.1 billion while net profit after tax rose by 19 percent to R789.8 million.
Headline earnings for the year increased by 16.5 percent to R779.3 million and it declared a final dividend of 8 cents per share.
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