Foodfund to retain 50pc stake in Simbisa acquisition

HARARE - United Arab Emirates-based fast-food group, Foodfund International (Foodfund's) existing shareholders are set to retain a 50 percent stake as quick service restaurant operator, Simbisa Brands, moves to acquire the casual and fine dining concern.

Simbisa yesterday said following its board’s approval of resolutions to acquire Foodfund in exchange for an issuance of Simbisa ordinary shares to be listed on the London Stock Exchange Alternative Investment Market (AIM), the parties had agreed on a 50-50 partnership to leverage Foodfund’s experience and expertise.

“The parties therefore agreed that in order to ensure an alignment of interests and maximise shareholder value in the long run, Foodfund’s existing shareholders will retain a 50 percent shareholding in Foodfund,” Simbisa said in a statement released yesterday.

This comes as the fast food company was trading under a cautionary statement issued in July 2017, informing shareholders that it was in discussions with an unnamed firm for the acquisition of an international complimentary business.

According to the new terms, Simbisa will utilise a maximum of 99 312 500 Simbisa shares issued and listed on AIM as consideration for a 50 percent beneficial interest in Foodfund, to be settled via a staggered issuance of up to 99 312 500 new shares.

“The new shares will be settled via an initial issue of 21 717 500 Simbisa ordinary shares, on the effective date in consideration for a 50 percent beneficial interest in Foodfund.

“Up to 65 782 500 Foodfund performance based earn-out shares being issued to the sellers if Foodfund achieves a cumulative profit after tax over a four year period above the earnings target of $3 384 358 and up to $13 635 609 on a pro rata basis of 6,417 Simbisa new shares for every $1 PAT generated above the earnings target and for the Foodfund financial years ending June 30 2019 – 30 June 2022.

“Additional Foodfund performance based earn out shares will be issued to the sellers on the pro rata basis of 2,355 Simbisa new shares for every $1 PAT generated above the cumulative Profit after Tax of $13, 635 609, capped to a total amount of 11, 812 500 Simbisa new shares,” Simbisa said.

The performance based earn out shares will be issued after release of the audited financial results of Foodfund.

“Following the changes it is now anticipated that a maximum of 174 312 500 Simbisa ordinary shares will be issued and placed under the control of the Simbisa directors. This will include the 75 000 000 new shares to be listed on AIM as part of the capital raise via an initial public offering,” the quick service firm said.

Initially, Simbisa sought shareholder approval to list its authorised share capital from 999 999 000 to 1 999 999 000 and to place 273 625 000 ordinary shares under the control of directors to be listed on AIM.

The board had also resolved to utilise a maximum of 198 625 000 Simbisa ordinary shares that are to be listed on AIM for the Foodfund acquisition.

Simbisa, which currently operates 432 quick service restaurants in 11 countries across Africa with future ambitions of further expansion across the region, registered a $6,4 million profit in the half year to June 2017.

The move will help Simbisa access equity financing from international market and increase its footprint as Foodfund’s current portfolio includes 17 outlets operating under eight independent food and beverage brands situated in Europe, the Middle East, South Africa and the United Kingdom.

 

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