Newsletter No.25 07 July 2017
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Long4Life offers to buy Holdsport
by Moyagabo Maake
Long4Life, an investment firm founded by businessman Brian Joffe, has made a nonbinding offer for Holdsport in a surprise move into the sports market.
In a cautionary announcement on Monday, the companies said Long4Life had submitted a nonbinding expression of interest to the parent of Sportsmans Warehouse, proposing a share swap of 10.44 Long4Life shares for each share in Holdsport.
“No additional information can be provided at this stage, other than what was contained in today’s [Monday’s] cautionary announcement regarding the potential acquisition by Long4Life of Holdsport,” said a Long4Life spokesman.
Holdsport CEO Kevin Hodgson had not responded to requests for comment at the time of publication.
“Long4Life has stated that their objective was to invest in the broader lifestyle area,” said Wayne McCurrie, portfolio manager at Ashburton Investments. “Holdsport is part of that segment broadly, but it’s an established business. I certainly thought that Long4Life would be going for more start-up types of prospects,” he said.
The proposed deal was a little outside his expectations for Long4Life, McCurrie said.
Long4Life’s share swap offer for Holdsport – which also owns Outdoor Warehouse and wholesalers First Ascent, Capestorm, Second Skins and African Nature – would result in Long4Life exceeding the number of shares it has in issue.
But Patrice Rassou, head of equities at Sanlam Investments, said Long4Life had the ability to issue shares to fund acquisitions. “Assuming they can issue a large number of shares, it implies a 10% premium [on Holdsport’s share price].”
Holdsport closed at R57.63 per share on Friday, before the announcement. Long4Life was worth R6.10 per share.
Should negotiations succeed, Joffe’s company would own a group that, despite trying times in the industry, managed to increase total sales 5.8% to R1.8bn in the year to the end of February. Retail sales rose 4.4% to R1.7bn, mainly from its 34 Sportsmans Warehouse stores.
The group has a total footprint of 63 stores.
The deal is the second for Joffe’s investment holding company, which was formed to invest in lifestyle businesses and was listed in April.
It is in advanced negotiations with beauty franchisor Sorbet, which Long4Life is willing to pay up to R130m to acquire.
Long4Life is planning to settle the acquisition in a mix of shares and cash.
“Long4Life under Brian Joffe can add value to any business,” said McCurrie.
“They clearly have plans to possibly alter Holdsport’s range of goods or sectors that they sell into. Holdsport has a reasonably large store footprint and a well-known brand. Both could benefit from this.”
SACTWU settles general goods and handbags leather sector negotiations
The Southern African Clothing & Textile Workers’ Union (SACTWU) has settled its 2017 wage negotiations for the General Goods & Handbags (GGH) leather sector.
The settlement was negotiated under the auspices of the National Bargaining Council for the Leather Manufacturing Industry of South Africa.
An 8% wage increase was agreed to, with the Association of South African Manufacturers of Luggage, Handbags & General Goods, which is the organisation representing employers in the sector. The trade union agency fee has also been increased from R14.75 to R15.64 per week.
The wage increase came into effect, nationally, on 1 July 2017 and is effective for a one year period.
This sector covers approximately 1977 workers.
Issued by Andre Kriel SACTWU General Secretary
Two industrial parks to become operational in Ethiopia
Mekele and Kombolcha industrial parks in Ethiopia will become operational soon. The Ethiopian Investment Commission (EIC) has replicated the plan of Hawassa industrial park in these new parks. Many big international textile and apparel brands have invested in Hawassa. Investments are expected to increase with the functioning of the new industrial parks.
So far, 18 companies have initiated operations in the Chinese built Hawassa industrial park. Development of industrial parks will boost the manufacturing sector, increasing the country’s gross domestic product, according to Prime Minister Hailemariam Desalegn.
PVH, company marketing portfolio of various brands including Calvin Klein and Tommy Hilfiger has already established its first manufacturing unit in Hawassa industrial park, according to Chinese news agency.
Hawassa Industrial Park is a basis for the country’s objective to become the manufacturing hub of Africa, said Desalegn at the park’s official operation commencement ceremony. He further added that favourable environment in the country will attract large number of foreign investors.
EIC is likely to approach Vanity Fair and H&M for establishing their units in these two parks. Over one billion US dollars has been sanctioned for the for the construction of industrial parks in the second five-year Growth and Transformation Plan (GTP-II) period, effective from 2015 to 2020.
Arvind Envisol to partner in Ethiopia’s green drive
Arvind Envisol, subsidiary of Arvind Limited, will partner with the Ethiopian government in its drive for green industrialisation. Arvind Envisol has inked MoU with the government to implement the Zero Liquid Discharge (ZLD) technology for industrial parks in the country. The initiative will boost Ethiopia’s GDP and will create employment opportunities.
A zero liquid discharge water treatment plant with the capacity of treating 11 million litres of waste water per day has already been set up at Hawassa Industrial Park by Arvind Envisol, according to Ethiopian media reports.
The Ethiopian Investment Council (EIC) and Industrial Parks Development Corporation (IPDC) will also develop ten mega industrial parks in various parts of the country. In an attempt to lower negative effect on the environment, the government intends to use ZLD technology in these industrial mega parks. ZLD ensures that the industrial parks use the minimum amount of ground water and has a zero liquid discharge outside the park.
A study on environmental sustainability in Ethopia’s textile and garment sector will be undertaken by the government of Ethiopia and Arvind. The study will focus on identifying various sustainable solutions and know the impact of the rapid industrialisation drive of Ethiopia. Various Ethiopian Universities have also signed MoU with the government to include a curriculum on sustainability in the wake of industrial development.
“The world has seen examples of several nations that, in a bid to boost economic growth, have ended up causing enormous environmental damage, eventually creating problems for their own people,” said Punit Lalbhai, executive director, Arvind Ltd.
“The Green Industrialisation platform that Ethiopia is seeking to build, I believe, is a sustainable industrial development strategy for the whole of Africa to emulate. We are happy to partner with Government of Ethiopia in this landmark initiative and hope that these joint efforts will go a long way towards bringing greater prosperity to the people of this great nation, while preserving the environment at the same time,” said Lalbhai.
Did you know..
While bushy eyebrows are in vogue these days, the fashionistas during the Renaissance period used to shave them off.
New York Mayor Fiorello Henry La Guardia invented the thong when he was scandalized to see the cities exotic bar dancers performing without underwear. He immediately ordered to sew tiny panties or thongs for them
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