South Africa’s AfroCentric to acquire Activo for $39 million

South Africa’s black-owned investment holding company, Afrocentric Investment Corporation Limited (AfroCentric) will acquire the remaining 74 percent of health and pharmaceutical company, Activo for R588 million ($39.32 million), the company has said.

In 2015, AfroCentric acquired 26 percent interest in Activo through its subsidiary ACT Healthcare Assets (AHA), and now the diversified investment company looks to acquire the remaining 74 percent.

“AfroCentric is invested in a number of healthcare services segments in both the public and private healthcare markets in South Africa, the acquisition of absolute control of Activo is therefore consistent with AfroCentric’s growth objectives through expanding its activity and application in its pharmaceutical supply and its medication distribution network,” a statement by the company said.

Activo Health Proprietary Limited operates as a subsidiary of WAD Holdings Proprietary Limited in South Africa and the company manufactures generic and OTC medicines, as well as complementary nutraceutical products. It offers products in the areas of ARV, anti-inflammatory, memory and concentration, carnation foot care, dermatology, multivitamin, supplements and throat care.

The collective sellers of Activo are WAD and Messrs SE Claassen (Claassen) and JPF Martin (Martin). WAD owns 16 percent shares in Activo and is a related party to AfroCentric. Shareholders Claassen and Martin, each hold a 11.2 percent interest in Activo.

Should AfroCentric meet all the required conditions, the acquisition process would be complete by 1 January 2019 which is the Effective Date of acquisition. The terms of the agreement stipulate that come 1 January 2019, AfroCentrics subsidiary, AHA, will acquire the remaining 74 percent of the ordinary shares in Activo including the shareholder loan claims against Activo.

The Sale Equity is 740 ordinary shares capital of Activo, representing 74 percent of the issued share capital. The sellers’ claims on loan account against Activo is equal to R3.7 million ($247,000) which would be paid to WAD in form of shareholder’s Loan.

A total of  R409.622 million ($27.361 million) will be paid to WAD in cash, following its 51.6 percent share sale Shares and its shareholder’s loan. R89.2 million each ($5.95 million) will be paid to Claassen and Martins; 5O percent of which would be paid in cash while the remaining 50 percent in form of ordinary AfroCentric Shares would be decided upon on the Effective Date. Some of the shares would be subject to a sale restriction for a period of three years from the Effective Date.

Since its founding in 2009, Activo has sold and marketed its products in South Africa and neighbouring countries, as well as Botswana and Namibia. Activo’s profits after tax for the year ended 30 June 2018 stood at R63 million ($4.2 million) while the company’s net asset value as at 30 June 2018 was R115 million ($7.68 million).