JSE-listed Rolfes has bought out Agricultural Chemicals’ (Agchem’s) minority shareholders for R37.9-million and expects the acquisition to better align its core businesses and strengthen the platform on which to grow the division and the company.

Rolfes say that it has agreed to acquire 20% of the issued shares in Agchem, together with any claims that the seller may have against Agchem, from the Pretorius Family Trust for R25.3-million in cash.

The transaction is subject to obtaining sufficient funding to discharge the purchase consideration and Johan Pretorius resigning as an employee of Agchem and renouncing any further claims against the company.

Agchem’s net asset value and net after-tax profit are R129-million and R16.2-million respectively, based on the unaudited results of the divisions for the six months ended December 31, 2014.

Rolfes has also agreed to buy 10% of the issued shares in Agchem and any claims that the seller may have against Agchem from the SP Naude Family Trust for R12.6-million in cash.

In addition, Stefan Naude will be entitled to back pay if certain profit growth hurdles are met over the next two financial years. The back pay will be determined by multiplying the difference between the actual profits achieved over the next two financial years and the hurdle profit rate by 5.5 and then by 10%. The back pay is capped at R10-million and, if Naude remains an employee of Agchem for the two-year period, will be payable before September 30, 2017.

The transaction with the SP Naude Family Trust is subject to obtaining sufficient funding to discharge the purchase consideration and Naude entering into a two-year extension of employment contract with Agchem, on mutually acceptable terms, with effect from July 1.

Rolfes says the net amount payable in terms of the transactions will be settled from bank debt facilities.

Both acquisitions are subject to obtaining the approval of the Takeover Regulation Panel (TRP) and any other regulatory approvals that may be required. The effective date of both transactions is July 1.

The Agchem division specialises in the development and manufacture of high-quality agrochemical products for world markets. It currently produces a range of insecticides, herbicides, fungicides, crop fertilisers, adjuvants, seed treatments, biological treatments, crop fertilisers and agricultural products.

Agchem remains central to Rolfes’s strategy, which is built on the global need for food, agriculture, water, industrial products and infrastructure development in developing countries and markets.

As such, Rolfes is positioning itself to build a substantial industrial group to provide specialised chemicals and related products and solutions to support these needs, primarily in Africa, but also in other specific strategically targeted geographical areas. Additionally, the group explains that it provides value-add through the deployment of intellectual capital and technological innovation in its chosen industries.

Rolfes advised shareholders on May 7 that the company is involved in negotiations on the acquisition of the remaining 30% shareholding in Agchem from minority shareholders, further expansion into speciality chemicals and the disposal of noncore assets.

The board of Rolfes does not believe Introlab, which supplies and distributes soluble fertilisers, and Acacia, a supplier of certain chemical raw materials to be core to the group’s or Agchem’s strategy and, hence, has taken the decision to dispose of its shareholding in these operations.

As such, Agchem has agreed to dispose of its 50% interest in Introlab’s issued shares and any claims that it may have against Introlab to the Pretorius Family Trust for R12.4-million, which is to be paid to Agchem in cash.

Introlab’s net asset value and net after-tax profit are R25.1-million and R2.5-million respectively, based on its unaudited results for the six months ended December 31, 2014.

Agchem has agreed to sell its 51% interest in the issued shares in Acacia and any claims that it may have against Acacia to the Indicator Trust for R6.3-million. This amount is to be paid to Agchem in cash on or before December 31 and will bear interest at a rate of 9.5% a year from the effective date.

Acacia’s net asset value and net after-tax profit are R12.7-million and R1.2-million respectively, based on its unaudited results for the six months ended December 31, 2014.

Both the Introlab and Acacia transactions will be effective on July 1 and are subject to obtaining the approval of the TRP and any other regulatory approvals required.