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Johannesburg - Pharmaceutical group Adcock Ingram's shareholders voted in favour of the company's landmark R1.3bn broad-based black economic empowerment (BEE) transaction at the company's general meeting on Friday.
The deal, which was first announced to the market last November, will see qualifying black employees and Adcock's selected BEE strategic partners acquire an effective 13% of the total enlarged issued share capital of Adcock Ingram Holdings Limited (AIP).
Commenting on shareholder support for the transaction, Adcock Ingram CEO Jonathan Louw said: "This is a landmark transaction for the South African healthcare industry and Adcock would like to thank its shareholders for the overwhelming support received.
"The beneficiary base of the transaction is in excess of 800 000 on a national scale, which demonstrates the truly broad-based nature of the transaction. We are delighted to have partners of the calibre of Kagiso Strategic Investments III, Kurisani Youth Development Trust and the Mookodi Pharma Trust, as well as our black employees, as new shareholders of Adcock."
Adcock Ingram executive responsible for the transaction Kuben Pillay said: "This transaction highlights our commitment to broad-based empowerment and the transformation of South African society. It embodies Adcock's mission of 'adding value to life'."
The transaction will be funded through a combination of unencumbered equity from the BEE partners and vendor facilitation from Adcock Ingram.
The BEE strategic partners, which comprise 75% of the transaction, were chosen for their business and broad-based empowerment credentials, as well as for healthcare and education initiatives they provide to underprivileged communities around the country.
The strategic partners include: - Kagiso Strategic Investments III, a subsidiary of Kagiso Trust, a respected NGO with a significant track record in financing and managing community development projects. Kagiso Trust has been involved in various community primary healthcare projects for the past 20 years.
- The Kurisani Youth Development Trust, the investment arm of loveLife, SA's national HIV/Aids prevention campaign. Kurisani was established to benefit the youth passing through loveLife's development and empowerment programmes. The organisation's youth healthcare initiatives extend deep into South Africa.
- The Mookodi Pharma Trust has been established as an investment vehicle whose beneficiaries include more than 100 black healthcare professionals.
Notably, in line with the spirit of broad-based BEE, 25% of the transaction has been set aside for Adcock's employees who qualify in terms of all relevant criteria as at March 31 2011. These qualifying employees, who will all receive the same entitlement, regardless of their seniority level within the company, will participate through an employee trust, named Mpho Ea Bophelo, meaning "gift of life" in Sesotho - and an ideal personification of Adcock's corporate values.
"This employee share ownership scheme was designed specifically with the intention of uplifting historically disadvantaged South Africans and adheres to the latest King 3 guidelines. A factory worker, for instance, will get the same number of shares as a senior executive," said Louw.
It is estimated that after the implementation of the transaction Adcock will have effective black ownership of more than 25%, if mandated investments and foreign operations are excluded from Adcock's enlarged issued share capital. This will result in Adcock achieving a Level 4 broad-based BEE contributor status.
- I-Net Bridge
