NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS | Note 34

34. Subsequent events
  Acquisition of Exeltis South Africa Proprietary Limited
 

AfroCentric via its subsidiary, Activo Health Proprietary Limited, entered into a sales of share agreement with Shelsley Chemicals Proprietary Limited to acquire all of the shares in Exeltis South Africa Proprietary Limited, effective 1st August 2021.

The name of Exeltis South Africa Proprietary Limited has subsequently been changed to Activo Health Care Assets Proprietary Limited.

Exeltis South Africa is the holding company of Forrester Pharma Proprietary Limited, involved in the marketing, selling and distribution of pharmaceutical products in South Africa, Namibia and Botswana. The company owns a number of registered legal rights to manufacture and distribute a specific medicine molecule/brand and have the right to a substantial pipeline of Dossiers in the process of being registered with the South African Health Products Regulatory Authority (“SAHPRA”).

The financial aspects of this transaction have not been recognised at 30 June 2021. The operating results and assets and liabilities of the acquired company will be consolidated 1st August 2021.
(i) Purchase consideration and fair value of net assets acquired
 

Details of the consideration transferred are:

    R’000 
Purchase consideration  
  Cash paid* 189 244 
  Contingent consideration 101 120 
Total purchase consideration 290 364 
* Included in the cash paid is the R150 million loan advance made to the owners of Exeltis in May 2021 as referred to in Note 3. This loan advance been applied against the purchase price.

AfroCentric Group has provided a guarantee to Shelsley Chemicals Proprietary Limited that Activo Health Proprietary Limited will be able to meet its financial obligations as set out in the terms and conditions of sale.

The provisionally determined fair value of the assets and liabilities of the Exeltis South Africa Proprietary Limited as the date of acquisition are as follows:

   Fair value 
R’000 
Cash and cash equivalents  1 171 
Property, plant and equipment  151 
Intangible assets  27 537 
Intangible assets – new dossier registration  83 139 
Receivables  178 
Payables  (760)
Net deferred tax assets  6 638 
Net identifiable assets acquired  118 054 
Add: Goodwill  172 310 
Net assets acquired  290 364 

The goodwill is attributable to Exeltis Group substantial pipeline of first to market generic molecules, none of the goodwill is expected to be deductible for tax purposes.

In particular, the fair values of the assets and liabilities disclosed above have only been determined provisionally as the independent valuations have not been finalised.

It is also not yet possible to provide detailed information about each class of acquired receivable and any contingent liabilities of the acquired entity.

Acquisition of Sanlam Gap Cover

AfroCentric Health (RF) Proprietary Limited, has entered into negotiations with Sanlam Health Solutions Proprietary Limited for the acquisition of a Gap Cover business that is supplementary to its current medical scheme offerings.

NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS | Note 34