The agreement has been structured through Coast2Coast, the majority shareholder in Ascendis, issuing the MIC a fixed coupon convertible, redeemable debenture to the value of R200 million.
Given the early stage of Ascendis as a listed company, coupled with its focused growth strategy, any issue of additional shares would be unwontedly dilutive to existing shareholders, meaning that the cost of the transaction will be borne entirely by C2C, resulting in no earnings dilution or impact for shareholders. The coupon will be convertible in three tranches into Ascendis shares.
Ascendis CEO, Dr Karsten Wellner comments, "We are excited about the conclusion of this meaningful empowerment deal which will see the BEE ownership in Ascendis grow from currently R165 million to a potential R365 million, assisting towards our transformation goals. The MIC invested in Ascendis during our listing in November 2013 and was keen to increase its exposure to the health sector via the company and become its key BEE partner. This is beneficial to the company and all its stakeholders and a growing contributor to the social development initiatives of MIC."
The MIC is a 100% black-owned investment company, established in 1995 by the Mineworkers Investment Trust (MIT) to create a sustainable asset base for the benefit of mine, energy and construction workers and their dependants. It has a net asset value of over R4.15 billion and over the past 19 years has disbursed over R390 million to the MIT, which has in turn advanced the money to fund its social development initiatives.
Mary Bomela, CEO of MIC commented, "The MIC has been looking at the health sector for a number of years, with a view to invest in a growing sector that is of national strategic importance. We believe Ascendis and its management team are a good fit with the company's own criteria for investing and look forward to a long and mutually beneficial relationship with Ascendis and C2C."
Dr Wellner concludes, "With the government committing huge investments in preparation of the implementation of the National Health Insurance scheme, we are focused on improving our position as a committed South African company to service contracts for hospitals, clinics and government tenders, especially with our industry leading brands and products. MIC is a highly respected BEE partner and it shares in our vision towards contributing meaningfully to the continued growth and transformation of the company."
Ascendis is a fast growing health products conglomerate, which markets health and care brands for humans, plants and animals. The company strategy delivers on combining mature, resilient health brands and expanding these locally and globally.
Listed on the JSE in November 2013, the group consists of three divisions: Consumer Brands (nutraceuticals, vitamins, sports nutrition and skin care); Phyto-Vet (plant and animal health) and Pharma-Med (prescription drugs and medical devices). Ascendis has delivered on the commitments made to shareholders at the time of the listing, with the results for the six months indicating that the group is well on track to exceed its pre-listing year-end forecasts. For more information, please visit www.ascendis.co.za.
