Imperial Logistics has unveiled a new broad-based BEE deal, which effectively gives two enterprises by black women a 25% interest in its SA operations.
Afropulse, led by co-founder Phumzile Langeni, and Willowton Group, which is involved in the fast-moving consumer space, will acquire 25% of Imperial Logistics SA operations, in a deal that will be settled through a combination of cash and share swap.
The BEE shareholders will swap their shares and invest a further R500m in the SA operations of Imperial Logistics.
Before the proposed transaction, Afropulse and Willowton already had a partnership with Imperial Logistics, though it was at the divisional level.
The proceeds will be used for working capital and to grow the logistics business in the SA market, where Imperial Logistics competes with the likes of Super Group, Grindrod and OneLogix, among other big JSE-listed players.
Imperial Logistics said in a statement on Friday that the transaction was “critical for the future prospects of the group, given its exposure to the SA market as part of its ‘Gateway to Africa’ strategy”.
Imperial Logistics Group SA (ILSA) will retain a 75% interest in the deal, which will be subject to a five-year lock-in period. BEE shareholders will be precluded from selling their shares in this period.
The BEE shareholders will acquire shares in the consolidated business, which is made up of Imperial Logistics Group SA and Imperial Logistics Advance Proprietary (ILA).
ILSA consists of dedicated contracts, cargo, managed solutions, health sciences, truck rental and cross-border businesses.
The core capability of ILA is the bulk road transportation management of liquid, gases, powders, ores and grains, which requires specialised assets and skills.
The deal will “also enhance Imperial’s competitiveness and appeal to its clients and customers in SA, which will contribute to sustaining current earnings and achieving future growth”, CEO Mohammed Akoojee said.
“The effective B-BBEE ownership of ILSA post implementation of the transaction will be more than 51%, with more than 30% black women ownership.”
Imperial Logistics has also appointed PwC to advise on the merits of the proposal.
Afropulse is an investment, investor relations and corporate advisory company, led by Langeni, who is the executive chair.
Langeni was also one of the special envoys appointed by President Cyril Ramaphosa several years ago to help SA attract $100bn worth of investments.
Willowton, the privately owned consumer goods company founded in 1970, manufactures a range of products that include edible oils, rice, sugar, margarines and spreads, beauty, toilet and laundry soaps.
The new BEE arrangement coincided with the news that Imperial Logistics had been awarded a tender to import Covid-19 vaccines.
The shares settled 1.80% lower to R46.25 on the JSE, giving Imperial Logistics a market value of R9.5bn.
Update: April 25 2021
This article has been updated to include the share price movement.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.