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Acquisition of Oro Agri SEZC Limited and Oro Agri SA (Pty) Ltd

1. Introduction

Omnia shareholders are advised that the Company, through its wholly-owned subsidiaries K2017443268 (South Africa) (Pty) Ltd (“NewCo1”) and K2017448055 (South Africa) (Pty) Ltd (“NewCo2”), has entered into two separate sale of shares agreements to acquire 100% of the ordinary shares of Oro Agri SEZC Limited (“Oro Agri SEZC”) and Oro Agri SA (Pty) Ltd (“Oro Agri SA”) for an aggregate maximum consideration of USD100 million. Reference herein to "Oro Agri" includes the Oro Agri Group, of which Oro Agri SEZC is the ultimate holding company.

2. Overview of Oro Agri

Oro Agri is an international company involved in the research and development (“R&D”), production, distribution and sales of a unique range of patented agriculture biological (“AgriBio”) products. The key product ranges include biostimulants, adjuvants, crop protection products, liquid foliar fertilizers and soil conditioners for large scale agriculture applications, including all row, stone fruit, pasture and other crop types, as well as smaller pasture, lawn and garden applications.

AgriBio products, which comprise of biopesticides, biostimulants and biofertilizers, are eco- friendly alternatives for crop protection, enhancement and nutrition without the use of traditional chemicals. The use of AgriBio products can substitute traditional chemical based pesticides, fungicides and herbicides. These products appear to be reaching their maximum performance levels due to growing resistance levels built-up by plants, insects and plant diseases over the years. The Oro Agri range of environmentally friendly products provides green solutions aimed at addressing traditional crop inhibiting diseases which stunt growth and reduce crop yield, increasing nutrient uptake and improving water use efficiency.

Oro Agri was established in the late 1990s and commenced operating as a corporate entity in the USA in 2002. The following year, PREV-AM® was registered as the first product of Oro Agri and sold as a bio-pesticide in the agriculture market. Since then, Oro Agri has expanded its global footprint across six continents and continued to develop a unique range of innovative products

that include brands such as OROWET®, TransPhloem®, TRANSFORMER®, WETCIT®, OROCIT®, VINTRE® and OROBOOST®.

Oro Agri operates in four major regions in the world, namely Brazil, Europe, South Africa and the USA, with Asia Pacific an important fifth major region that is at an early stage of development. Aside from Europe, Oro Agri owns and operates in-house production and R&D facilities in the three other regions in which it has a presence. Plans are underway to establish a strategically located facility in the Eurozone.

Oro Agri has a well-developed global sales and distribution network in more than eighty countries with an established network of distributors, agents and directly employed staff to market and sell its products. Targeted markets include countries with extensive agriculture production areas along with well-developed product registration systems and appropriate legislation to ensure protection of its Intellectual Property (“IP”).

3. Transaction rationale

Omnia’s Agriculture Division is a market leader in plant nutrition products and services in South Africa and Southern Africa, working closely with customers to improve the performance of their crops for the last sixty-four years. Omnia is also recognised as an international player in the AgriBio and water soluble nutrient markets. Its product range is manufactured in South Africa and Australia and is currently sold into twenty-eight countries globally.

In line with the next phase of the “Green Revolution” in the global agriculture sector, the demand for AgriBio products is further underpinned by the increasing emphasis on nutrient and water use efficiency coupled with the rising demand for products that are environmentally friendly, enhance crop performance and improve yields. This is in line with both Omnia and Oro Agri’s approach to the formulation and production of plant nutrition products over many decades.

AgriBio sciences is changing the future of agriculture and is gaining exceptional momentum as the world becomes more environmentally friendly and health conscious. The limitations of traditional chemicals can be overcome using AgiBio products, leading to increased food production despite the limitation in resources, thereby contributing to a sustainable environment. The rate at which the AgriBio industry, and Oro Agri’s market share of the industry, is growing testifies to the impact thereof. For Omnia it is the next step in the evolution of its stated strategy of the Nutriology™ concept, “the science of growing”.

Oro Agri is a high growth international AgriBio player with strong complimentary attributes to accelerate Omnia’s growth into key agriculture markets where Oro Agri is already well established. For the past few decades, Omnia has been a leading player in conducting extensive R&D into plant nutrition, soil science and water usage in the agriculture sector and in developing related products, solutions and services for customers. The combined product ranges between the two companies complement one another and will provide a broader market offering of AgriBio products into the agriculture sector.

The sale and distribution of Omnia’s existing range of plant nutrients, biostimulant products and agriculture services, is expected to increase significantly by leveraging the Oro Agri global network. Omnia will eliminate the time, cost and risk associated with establishing a similar global network as well as the extensive R&D required to formulate comparable products to the same standard as Oro Agri. In so doing, Omnia will be in a position to focus on leveraging the synergies between the two companies in order to maximise the sales potential in these key markets.

Omnia’s IP portfolio and product registrations process will be enhanced by the experience and knowledge of the Oro Agri team in the various jurisdictions in which it operates.

4. Terms of the Transaction

NewCo2 has entered into a sale of shares agreement with Oro Agri SEZC to acquire 100.00% of the ordinary shares of Oro Agri SEZC for a total acquisition consideration of USD96 million and NewCo1 has entered into a sale of shares agreement to acquire 52.08% of the ordinary shares of Oro Agri SA from Mr MD Pullen (“D Pullen”) for a total consideration of USD4 million as part of one interdependent, indivisible and simultaneous transaction (“the Transaction”). The remaining 47.92% of the shares in Oro Agri SA are held directly and indirectly by Oro Agri SEZC. The two sale of shares agreements are hereinafter collectively referred to as "the Agreement".

On closing, the total acquisition consideration will be paid as follows:

4.1 a payment of USD4 million to D Pullen on the Closing Date; and

4.2 a payment of USD50 million to the Oro Agri SEZC shareholders on the Closing Date.

The “Closing Date” is the last day of the month in which the fulfilment or waiver of the last of the suspensive conditions occurs, except if this occurs on 31 March 2018, then closing shall occur on 1 April 2018.

The effective date of the Transaction is 1 January 2017.

4.3 The balance of USD46 million, is subject to the following:

4.3.1 USD29 million is payable on the fifth business day following the six-month anniversary of the Closing Date less any deductions in respect of leakage as defined in the Agreement;

4.3.2 USD15 million is withheld as a retention amount in respect of permitted deductions including warranty claims and indemnified losses ("Permitted Deductions") for a minimum period of twenty-four months, subject to the specific requirements as set out below; and

4.3.3 USD2 million is paid on the six-month anniversary of the Closing Date to Oro Agri SA’s legal advisers and held in trust, in order to fund costs in respect of the Transaction, subject to the specific requirements as set out below.

4.4 In terms of the specific requirements relating to the retention amounts,

4.4.1 the balance of the USD15 million less Permitted Deductions, is payable on the fifth business day following the twenty-four month anniversary of the Closing Date. Where an estimated amount in respect of a Permitted Deduction has been retained beyond the twenty-four month period, the balance, if any, shall be paid to the Oro Agri SEZC shareholders once the quantum of such Permitted Deduction has been finally determined. The Oro Agri SEZC shareholders' aggregate liability in respect thereof is limited to a maximum of USD15 million; and

4.4.2 the amount of USD2 million is to be appropriated in respect of company transaction costs as defined in the Agreement, with the balance thereof, if any, payable to the Oro Agri SEZC shareholders by Oro Agri SA’s legal advisers on the twenty-four month anniversary of the Closing Date.

4.5 Omnia will fund the Transaction through existing available cash.

4.6 Following the implementation of the Transaction, Oro Agri SEZC and ORO Agri SA will become indirect subsidiaries of Omnia and report under the Agriculture segment in the consolidated results. Omnia will ensure that the Memoranda of Incorporation of Oro Agri SEZC and Oro Agri SA do not frustrate or relieve Omnia in any manner from compliance with the Listings Requirements of the JSE Limited (“JSE Listings Requirements”).

5. Conditions precedent to the Transaction

The Transaction is subject to the fulfilment and/or waiver of a number of conditions precedent, including amongst others:

5.1 approval by all regulatory authorities required under law, including the approval by the South African Reserve Bank;

5.2 the consent to change of control in relation to material contracts and group loan agreements being obtained post signature of the Agreement;

5.3 Omnia being satisfied that the restraints of trade and intellectual property assignments to be entered into with identified key employees of Oro Agri have entered into an agreement with Oro Agri SEZC incorporating inter alia adequate intellectual property assignment provisions, confidentiality undertakings and restraints and;

5.4 no material adverse change having occurred.

The Transaction is not notifiable from a competition law perspective in all the jurisdictions in which Oro Agri operates.

6. Net assets and profits of Oro Agri

Oro Agri’s historical financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). Omnia reports under International Financial Reporting Standards (“IFRS”) and there is no material impact on the results set out hereunder that are reported in accordance with U.S. GAAP.

6.1 as at 31 December 2016, Oro Agri had total net assets of USD15.0 million. For the financial year ended 31 December 2016, Oro Agri reported revenue of USD35.2 million, earnings before depreciation, amortisation, interest and taxes of USD3.4 million and a net profit after tax of USD0.8 million; and

6.2 as at 31 December 2017, the reviewed but unaudited results of Oro Agri reflected net total assets of USD21.3 million. For the financial year ended 31 December 2017, Oro Agri reported revenue of USD51.5 million, earnings before depreciation, amortisation, interest and taxes of USD10.1 million and net profit after tax of USD5.2 million. Included in the net profit after tax of USD5.2 million reflected above are a number of once off costs that Oro Agri incurred in the December 2017 financial year amounting to USD1.0 million pre-tax and USD0.9 million post-tax. These once-off costs comprise of transaction advisory fees, staff remuneration and travel expenses related to the Transaction, as well as taxation incurred in the structuring of Oro Agri prior to the Transaction, which is payable as a result of the change of control pursuant to the Transaction.

7. Financial information

The Oro Agri Group currently reports its results in accordance with US GAAP. The net profit after tax of the Oro Agri Group for the year ended 31 December 2017 was USD5.2 million and the total net asset value at 31 December 2017 was USD21.3 million as reflected in the unaudited financial statements as at and for the year ended 31 December 2017.

There are differences in accounting treatment IFRS, which Omnia applies, and U.S. GAAP. Since Oro Agri will be required to comply with the accounting policies of Omnia from the effective date of the Transaction, the results and financial position of Oro Agri will need to be prepared in accordance with IFRS. The numbers could be different as a result of the following:

7.1 Trademark and registration costs: costs related to trademarks and registrations have been expensed under U.S. GAAP, while under IFRS there is the possibility that these costs are capitalised and subsequently amortised; and

7.2 Internally developed intangible assets: costs related to R&D have not been capitalised under U.S. GAAP. Development costs that meet certain criteria under IFRS are capitalised.

Additionally the impact of the accounting for the Transaction on the effective date may impact the results going forward, particularly in relation to the amortisation of identifiable intangible assets that are recognised when the Oro Agri Group is first consolidated.

8. Categorisation

The Transaction is classified as a Category 2 transaction in terms of the JSE Listings Requirements.

9. Additional information

For additional information regarding the Transaction, Omnia shareholders are referred to the investor presentation which is available on www.omnia.co.za.

Omnia management will also host an investor call at 12h00 (CAT) today, 1 March 2018. The details are as follows:

South Africa (Toll Free) - 0800 200 648

Johannesburg (Neotel) - 011 535 3600

Johannesburg (Telkom) - 010 201 6800

UK - 0 333 300 1418

USA and Canada - 1508 924 4326

Participants should request to be joined into the Omnia Holdings call.

Johannesburg
1 March 2018

Financial advisor
Rand Merchant Bank (A division of FirstRand Bank Limited)

Transaction advisor
Translink Corporate Finance

Legal advisors
Webber Wentzel
Linklaters LLP
Falcon & Hume Inc
Carey Olsen Cayman Limited

Financial and tax advisor
PricewaterhouseCoopers

Sponsor
Merchantec Capital

Communications advisor
Brunswick