Lonrho buys 51% of fresh produce firm for R40m

Lonrho Plc (LAF), the conglomerate with a structured portfolio of African investments, said on Friday that it would buy 51% of agri-processing and logistics company the Rollex Group for R40 million in cash.

The contract to buy Rollex commits Lonrho to two further payments linked to the EBITDA performance of Rollex. The two payments will respectively be due after the February 2009 and February 2010 audited accounts are produced, each calculated as Rollex EBITDA multiplied by 5.3 and then multiplied by 12.75%.

Rollex, which was established in 1989, sources, packs and delivers fresh fruit, vegetable and fish produce from across Africa to its network of high-profile retail clients, including Woolworths in South Africa, and Marks & Spencer, Tesco, Sainsbury, World Flowers, TFC Holland and Univeg in Europe.

In sub-Saharan Africa, Rollex is the market leader within its sector and distributes chilled perishable produce by air and road freight.

For the year ended February 28 2007, Rollex reported an audited turnover of US$39.5 million, an operating profit of US$1.9 million (US$0.3 million net profit before tax after exceptionals) and had assets of US$15.8 million. Its 2008 management accounts show an increase in turnover to US$48.8 million.

"Food processing and export from Africa to the blue chip retail markets in Europe is a key African industry with huge growth potential and the opportunity to create jobs in Africa," said David Lenigas, Lonrho's executive chairman.

This acquisition allows Lonrho to enter into the fast-growing agri-processing market.

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