eBusiness Weekly
Tawanda Musarurwa
HARARE – Fast foods group Simbisa Brands is looking to acquire foreign complementary business – Foodfund – once it completes its proposed listing on the London Stock Exchange (LSE).
Foodfund is a family-owned and operated business incorporated in the United Arab Emirates, the British Virgin Islands and the Republic of South Africa. But the proposed acquisition will follow the company’s successful listing on the LSE.
Last year, the company said its board of directors had approved the application for a secondary listing on the Alternative Investment Market (AIM) and was now awaiting approval from the central bank and local regulators. Simbisa listed on the Zimbabwe Stock Exchange in November 2015 after it was spun off from Innscor Africa.
Simbisa said in circular to shareholders today that it will convene an extraordinary general meeting (EGM) to seek shareholder approval for the listing and subsequent acquisition. The EGM is set for March 9.
“At a meeting held on July 21, 2017, the board of directors of Simbisa considered and identified a potential opportunity for the acquisition of Foodfund. It was undertaken to conclude the transaction in lieu of its shares,” said Simbisa.
According to a circular, the negotiated value of the transaction at the effective date of the acquisition, that is July 1, 2018, is to be settled via staggered issuance of up to 198 million Simbisa ordinary shares that are to be listed on London Stock Exchange’s Alternative Investment Market (AIM).
Foodfund’s portfolio currently includes 17 restaurants operating under eight independent food and beverages brands in Europe, Middle East, South Africa and the United Kingdom. In the year to June 30, 2017, the firm achieved a revenue of AED150 million and a profit after tax of AED7, 9 million. The issuance of these new shares will involve an initial issue of 127 million Simbisa ordinary shares on the effective date of the Foodfund acquisition.
Up to 47 million Foodfund performance based earn out shares will be issued if the firm achieves a cumulative profit after tax above the earnings target of $9,953 million and up to $ $13,635 million pro-rata basis of 12,834 Simbisa new shares for every dollar profit after tax generated above the earnings target and for the Foodfund financial years ending June 30 2019 to June 30, 2021.
The issuance also entails that additional Foodfund performance based earn-out shares will be issued on the pro rata basis of 4,71 Simbisa new shares for every $1 profit after tax generated above the cumulative after tax profit of $13 million, capped to a total amount of 23 million Simbisa new shares.
Simbisa owns some of Zimbabwe’s popular restaurant chains, namely Pizza Inn and Chicken Inn, as well as franchises for Nandos and Steers of South Africa. The company has outlets in 11 African countries, including Kenya, Ghana, Mauritius and Zambia.
