Plastics packaging specialist Bowler Metcalf has finalised the much-anticipated sale of its 41.38% stake in SoftBev, which bottles niche soft-drink brands like Jive and Pepsi.
A Sens announcement released on Monday indicated that the final enterprise value of SoftBev would be determined by the actual profits achieved by the company for the year ending June 30 2018.
Confirmation of the long-awaited sale provided plenty of fizz to Bowler’s share price, which finished the day 12.2% stronger at R10.10.
SoftBev has been bought by The Beverage Company, parent of Gauteng and Eastern Cape-based beverage producer Little Green Beverages.
Bowler said the minimum consideration for its shareholding would be about R233m after various adjustments.
The company said the final amount of the purchase consideration — after taking account of SoftBev’s final net debt and working capital position — could include a deferred consideration of up to R126m.
This meant a price range for Bowler’s stake of between R233m and R359m.
Bowler indicated that in addition to the sale of its equity stake in SoftBev, a loan claim of about R79m would also be repaid. Bowler CEO Friedel Sass said the SoftBev windfall would be mobilised for the expansion of the core packaging business and related property investments, as well as new business ventures that met the company’s strategic objectives.
He also envisaged that part of the proceeds from the SoftBev sale would be paid out to shareholders in a cash dividend.
SoftBev was formed around five years ago with the merger of Cape Town-based Quality Beverages and Durban-based Shoreline. While both companies cornered profitable niches in the Western Cape and KwaZulu-Natal, the merged business battled to crack the competitive Gauteng market.
The Beverage Company, however, is already involved in the manufacture, bottling, marketing and distribution of soft drinks, energy drinks, mixers and water. It has a strong presence in Gauteng, Eastern Cape, Mpumalanga and Limpopo with its Refreshhh brand.