JSE-listed ARB Holdings and its subsidiary Eurolux have taken the next step towards acquiring 100% of the total issued share capital of Radiant Group from South Ocean Holdings.
The parties on Wednesday announced the signing of the definitive agreements, which outlined that the purchase price for the sale equity will be calculated on the effective date and based on the tangible net asset value of Radiant, less a fixed amount of R20-million, to a maximum purchase amount of R117-million.
The effective date will be the last day of the month in which the last of the suspensive conditions are fulfilled or waived or a date is agreed upon by the parties, ARB said in an update to shareholders.
The tangible net asset value of Radiant, together with the properties, for the six months ended June 30 was R200.7-million.
The revenue and losses after tax attributable to Radiant shareholders for the half-year reviewed amounted to a respective R137.7-million and R11.4-million, including significant impairments and write-downs of R13.2-million.
The purchase price for the five Radiant properties, comprising Erven 445 and 446 Wynberg, Erf 539 Wynberg and Erven 1111 and 1112 Marlboro, is a fixed amount of R88-million, subject to receipt of a structural engineer's report, electrical compliance certificate and an entomologist’s report.
The sale remains subject to suspensive conditions, such as board approval, the approval of the Competition Commission before November 30, and the completion of a due diligence investigation to the satisfaction of ARB by September 14, besides others.
The acquisition will enable Eurolux to gain access to a leading lighting brand and a channel to a market in which Eurolux has very little current representation.
Radiant imports and distributes a range of light fittings, lamps and electrical products to the housing, infrastructure, building and construction sectors throughout South Africa and 17 African countries from its operations in Wynberg.
“Eurolux will continue to focus on its strength in the retail business and Radiant will focus on the wholesale, construction and project sectors of the market,” ARB said.
The purchase consideration will be settled in cash by Eurolux, with funding from Eurolux's shareholders.