Acquisition of 49% in Depston Ltd

RNS Number : 6204C

Craven House Capital PLC

19 March 2014

 



19 March 2014

Craven House Capital Plc

("Craven House" or the "Company")

Acquisition of 49% interest in South African Sporting Goods Import and Distribution Business

The Company today announces that it has acquired a 49% interest in Depston 1 (Pty) Ltd ("Depston"), a South African import and distribution business, specialising in sporting goods, for a total consideration of US$2,000,000. Simultaneously, the shareholders of Depston have agreed to subscribe for 96,000,000 new ordinary shares of 0.1 pence each in the Company ("Ordinary Shares") for 1.25p per share, amounting to an aggregate subscription of £1,200,000 (approximately equivalent to US$2,000,000).

Depston is a South African company, based in Cape Town that trades under the name of "The Bicycle Company" ("TBC"). Further information on the business can be found at www.thebicyclecompany.co.za.

TBC has exclusive distribution rights across South Africa for, inter alia, two major international sporting brands;

·    US based 'Trek' bicycles, one of the global market leaders for professional and amateur specialist bicycles; and

·    Swedish clothing brand 'Craft', designers of athletic and outdoor wear.

The business operates through two subsidiaries, Trek Distribution SA (Pty) Ltd and Craft Distribution SA (Pty) Ltd, and has 22 employees. With a well-established network of sports retailers across South Africa, the directors of Craven House believe the business is well position to attract additional brands looking to enter the South African market. TBC's unaudited management accounts for the year-to-May 2013 show revenue of R42,941,000 South African Rand, equivalent to c.£2,400,000, with a significant increase in revenues forecast for the current year.

Mark Pajak, Acting Chairman, commented, "We are delighted to announce this investment, which represents an outstanding opportunity to become involved in the import and distribution business in South Africa. TBC's management have a long and successful track record in sales and distribution to the retail clothing industry in South Africa. The two high-profile brands already signed-up by TBC provide an excellent platform to expand its business and attract further sports retailers to the region. This is demonstrated by TBC's recent success in executing an exclusive agreement to distribute the shoe brand 'Hoka One One' in South Africa. Once again we are delighted to have completed a transaction utilising the Company's shares as acquisition currency. We look forward to TBC's rapid growth continuing with our support."

Application has been made to the London Stock Exchange for the new Ordinary Shares to be admitted to trading on AIM. Admission is expected to take place on 25 March 2014. The shares will rank pari passu with the existing issued ordinary shares.

Following the issue of the new ordinary shares, the Company's total issued share capital will consist of 798,466,557 ordinary shares with each share carrying the right to one vote. The Company has no ordinary shares held in treasury. The total of 798,466,557 ordinary shares may therefore be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

For further information please contact:

Craven House Capital Plc	Alexandra Eavis	020 7002 1027
Daniel Stewart & Company (Nominated Adviser) (Broker)	Antony Legge / James Thomas Mark Treharne	020 7776 6550

www.cravenhousecapital.com 

 

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