Kaap Agri Limited ("Kaap Agri”) is a diversified group with businesses spanning the agriculture, retail, manufacturing, fuel and convenience sectors, with a footprint across more than 200 operating points in South Africa and Namibia. The Fuel Company Operations (Pty) Ltd (“TFC”) is a subsidiary of Kaap Agri operating a multi-branded retail fuel and convenience network across South Africa.
Kaap Agri is pleased to announce the conclusion of an agreement (“Agreement”) for the acquisition by Kaap Agri’s subsidiary, TFC, of 100% of the business operations of the PEG Retail Holdings (Pty) Ltd group (“PEG Group”), a leading independent fuel retailer in South Africa operating a number of service stations (including fuel forecourts, quick service restaurants and convenience shops) mostly alongside national highways. The Agreement is still subject to standard suspensive conditions, including the approval of the Competition Authorities. The proposed acquisition does not include any properties.
This proposed acquisition will enable TFC to expand its footprint, diversify its business and to utilise the cash resources generated by the PEG Group appropriately.
As the PEG Group is highly cash generative with low post transaction capex requirements, the acquisition will be earnings enhancing for current KAL shareholders and will further improve the KAL Group’s return on invested capital.
Sean Walsh (CEO of Kaap Agri) said: “The PEG Group is a highly profitable business, and the transaction will be earnings enhancing for Kaap Agri. This is truly a unique empowerment business transaction, unlocking new opportunities for sustained growth.”
Jayson Abrams (MD of TFC) said: “The transaction will be beneficial to TFC by incorporating a very strong PEG Group management team and service station operators. Furthermore, it will increase the BEE shareholding of TFC after the transaction is implemented to a level in excess of 50%, making it the leading or at least one of the leading BEE fuel champions as far as transformation is concerned.”
Xolisa Bangazi (MD of the PEG Group) said: “This is a win-win for both parties and I look forward to working with the TFC team in furthering the business and exploring new business opportunities.” Xolisa remains invested in the business and will acquire shareholding in TFC upon implementation of the transaction.
Kaap Agri notes that a detailed circular will be sent to shareholders in due course. However, please contact Kaap Agri on the details below should you require any further information.
Issued by MediaVision on behalf of Kaap Agri.
Media enquiries
Gerhard Cloete
MediaVision
Cell: 083 300 6850
E-mail: gerhard@mediavision.co.za