Incorporated in the Republic of South Africa, Afrimat Limited has emerged as a key player in the construction materials industry. By acquiring LSA, a leading provider of construction materials in South Africa, Afrimat aims to expand its national footprint and product offerings, while driving operational efficiency within the construction materials segment.
As part of the Holcim Group, LSA has built a strong reputation for delivering high-quality construction materials, including aggregates, concrete, cement, and fly-ash, which are in high demand within the construction industry. LSA’s commitment to reliable quality and high-performance products aligns well with Afrimat’s focus on customer satisfaction and product development.
The acquisition is a strategic move by Afrimat to meet growing customer demands and enhance its competitive advantage. By expanding its reach and optimizing operational efficiency, Afrimat aims to capitalize on emerging opportunities and reduce costs across all staffing categories. The company’s ongoing efforts to develop the necessary skills and expand its product portfolio are expected to be further strengthened by this acquisition.
Under the terms of the share purchase agreement, Afrimat will pay a purchase consideration of $6 million in cash upon the closing date. Additionally, Afrimat has committed to repaying or facilitating the repayment of a loan totaling R900 million owed by LSA to the seller, with an initial cash payment of R500 million on the closing date. The outstanding balance of R400 million will be interest-free and repaid within twelve months. Furthermore, the Seller Group Loan will be converted into Euro upon the closing date, ensuring a smooth transition for all parties involved.
The successful completion of the acquisition is subject to the fulfillment or waiver of several conditions precedent. These conditions include the approval of the Competition Authorities, the Minister of Mineral Resources and Energy of South Africa, and the Financial Surveillance Department of the South African Reserve Bank. Once these conditions are met, the closing date will be set as the 10th business day thereafter.
According to the latest unaudited consolidated management accounts of LSA Group, the net asset value as of December 31, 2022, amounted to R1.4 billion, with an attributable profit before interest, taxation, depreciation, and amortization of R38 million for the same period. While there has been a decrease compared to the previous year’s figures, Afrimat remains optimistic about the potential growth and synergy arising from the acquisition.
The acquisition of Lafarge South Africa by Afrimat Limited falls under the category 2 transaction as per the JSE Limited Listings Requirements, further highlighting the significance and scale of this strategic move. Afrimat has also committed to ensuring compliance with the JSE Limited Listings Requirements after the closing date, as stated in paragraph 9.16 of the requirements.
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