BCK - Blackstar - Disposal of Investment
Posted Tue, 21 Feb 2012
BCK - Blackstar - Disposal of Investment
Blackstar Group SE
Previously Blackstar Group PLC
(Incorporated in England and Wales)
(Company number SE 30)
(registered as an external company with limited liability in
the Republic of South Africa under registration number
Share code: BCK
("Blackstar" or "the Company")
Disposal of Investment
Blackstar is pleased to announce that it has entered into a conditional
agreement for the sale of 72,989,078 ordinary shares in Litha Healthcare Group
Limited ("Litha") to Paladin Labs Inc. ("Paladin") (the "Disposal"). The
Disposal, for a cash consideration of R200,719,964.50 (GBP16.6 million),
represents 50% of Blackstar`s interest in Litha and equates to R2.75 per Litha
On completion, the Disposal proceeds will represent a 4.58 times return on
investment in South African Rand and 5.36 times return in Pounds Sterling, which
equates to a 32% IRR and 36% IRR, respectively, over the 5 year holding period.
The Disposal proceeds will be applied against the Investec Bank Limited debt
facility that was taken out recently to fund the purchase of shares in
Mvelaphanda Group Limited, as announced on 18 January 2012.
The Disposal forms part of a larger transaction, facilitating Litha`s
acquisition of 100% of Pharmaplan Proprietary Limited ("Pharmaplan") from
Paladin for R590 million in cash and shares, as announced on 21 February 2012.
Pharmaplan is one of the fastest growing specialist pharmaceutical companies in
South Africa. Following on from the Disposal, and the Pharmaplan acquisition
(collectively the "Transaction"), Paladin will become a new strategic
shareholder in Litha owning 44.52% of the ordinary share capital. Following the
Transaction, Blackstar will retain 73 million shares or 13.4% of the ordinary
share capital of Litha.
The acquisition of Pharmaplan gives Litha the appropriate scale in all three
divisions in which it operates, namely pharmaceuticals, vaccines and medical
devices. Following the Paladin acquisition, the Litha Pharma Division is
expected to become Litha`s most profitable division by earnings, as such the
group`s profitability is expected to be positively impacted.
Blackstar is a founding shareholder in Litha (formerly Myriad Medical) having
invested in the business prior to its IPO in October 2006. Blackstar has been
actively involved in Litha and the development of the business, as well as
leading many of Litha`s successful acquisitions. On this occasion, Blackstar
will earn a R5 million (GBP0.4 million) corporate finance fee, payable in cash,
for its role as originator and underwriter of the Transaction.
The sale agreement is subject to the fulfillment of certain suspensive
conditions, which are standard in a transaction of this nature, including the
approval of the South African Competition Authorities. Blackstar`s remaining
shares will be subject to a 6 month lock up, with Paladin having a pre-emptive
right over these shares. The transaction is expected to be completed in the
second half of 2012.
Andrew Bonamour, director of Blackstar and Chairman of Litha, commented:
"Litha has been a very successful investment for Blackstar and the Blackstar
board is pleased that it has been able to generate these returns on investment
for shareholders. The Pharmaplan acquisition provides the appropriate scale to
the Litha group as a whole and should positively impact the group`s
profitability. It will solidify the Litha business model in South Africa and
will assist with the long term strategy to expand its African footprint in the
sub-Saharan African healthcare market."
21 February 2012
For further information, please contact:
Blackstar Group SE John Kleynhans +352 402 505 427
Liberum Capital Chris Bowman / +44 (0) 20 3100 2222
Limited Christopher Britton
PSG Capital (Pty) David Tosi +27 (0) 21 887 9602
Date: 21/02/2012 15:30:01 Produced by the JSE SENS Department.
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