Rex Trueform Group Limited has announced a significant increase in its stake in Telemedia Proprietary Limited. The company will boost its shareholding from 63.71% to 88.71%. This move follows the conclusion of seven separate sale agreements.
Acquisition Details
Rex Trueform is acquiring a further 25% interest from minority shareholders. The vendors are Stephen Mark Bretherick, Ryan David Bretherick, Andrew Victor Louis, Divesh Debidayal Maharaj, Humbulani Beverly Silwalivhathu, Quentin Grant Barkhuizen, and John-Paul Meeser.
| Vendor | Stake Acquired |
|---|---|
| Stephen Mark Bretherick | Undisclosed |
| Ryan David Bretherick | Undisclosed |
| Andrew Victor Louis | Undisclosed |
| Divesh Debidayal Maharaj | Undisclosed |
| Humbulani Beverly Silwalivhathu | Undisclosed |
| Quentin Grant Barkhuizen | Undisclosed |
| John-Paul Meeser | Undisclosed |
Rationale Behind the Acquisition
Telemedia, founded in 1981, is a broad-based media broadcast facility manufacturer and supplier. Its services include satellite transmission, radio and television signal distribution, and microwave and satellite news gathering. Telemedia also provides broadcasting, studio recording, and ancillary services.
Initial Investment and Performance
Rex Trueform, with its controlling shareholder African and Overseas Enterprises Limited (AOE), first invested in Telemedia in November 2020. They acquired a 63.71% and 11.29% interest, respectively. This initial investment allowed Rex Trueform to diversify its portfolio into the media and broadcasting sector.
Since the initial investment, Telemedia has shown strong performance. This success prompted Rex Trueform to acquire the remaining 25%. The company aims to fully integrate Telemedia into its portfolio and leverage its success for future growth.
Salient Terms of the Transaction
Payment of the purchase consideration will occur on the effective date. This date is the first business day after the last condition precedent is fulfilled or waived. The total purchase consideration payable to the vendors is R14,145,572 in cash.
| Purchase Consideration | Amount (R) |
|---|---|
| Total | 14,145,572 |
Conditions and Warranties
Each sale agreement depends on the waiver of pre-emptive rights by the remaining vendors of Telemedia. The agreements include warranties typical for transactions of this nature.
Financial Information
The net asset value of 100% of Telemedia is R61.4 million. The profits attributable to 100% of Telemedia are R11.4 million. This data is from the unpublished unaudited management accounts of Telemedia for the 11 months ended 31 May 2024. These accounts were prepared according to International Financial Reporting Standards (IFRS). Rex Trueform confirms satisfaction with the quality of these management accounts.
| Financial Metrics | Amount (R) |
|---|---|
| Net Asset Value | 61,400,000 |
| Profits (11 months to 31 May 2024) | 11,400,000 |
JSE Categorisation
According to the JSE Listings Requirements, the transaction is classified as a category 2 transaction. Therefore, it does not require shareholder approval.
Conclusion
The acquisition marks a strategic move for Rex Trueform, further solidifying its position in the media and broadcasting sector. The company looks forward to leveraging Telemedia’s strong performance for future growth.