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Johannesburg - Truworths [JSE:TRU] advised in a Sens report on Tuesday that it has signed a letter of intent with the shareholders of Earthchild Clothing to acquire 100% of their shares in Earthchild, subject to certain conditions.
Earthchild is a retailer of fashionable children's and ladies clothing and associated apparel under the Earthchild and Earthaddict brands.
"A relaxed natural philosophy is at the heart of both brands, and the company manages a network of 43 stores in premier shopping malls and retail districts throughout South Africa," said Truworths in a Sens statement.
"Founded in 1994, Earthchild operates from a design and distribution centre headquartered in Cape Town, and has grown its retail presence markedly in the past four years by leveraging its brand values of quality, comfort, natural organic fabrics and social responsibility."
The proposed acquisition is conditional upon satisfactory findings from a due diligence investigation, the execution of written agreements typical of a transaction of this nature and the required regulatory approvals, amongst other conditions.
The transaction falls below the threshold of a categorised transaction in terms of the JSE listings requirements, and the parties have agreed not to disclose the purchase consideration, which is to be settled in cash.
The effective date of the acquisition is expected to be in the first quarter of 2015 and key executives of Earthchild, who are amongst its shareholders, have agreed to remain in its employ at least until the conclusion of the three year earn-out period relating to a portion of the purchase consideration.
Truworths CEO Michael Mark said Earthchild would add an important new dimension to the Truworths portfolio of fashion retailing interests.
"I am excited by the intended acquisition of the Earthchild and Earthaddict businesses, which have great growth prospects and which, together with our rapidly expanding LTD Kids business, reinforce our growth prospects in this area of the market," said Mark.
"We are committed to providing the necessary financial and other resources to increase the number of Earthchild and Earthaddict stores relatively rapidly, introduce a credit facility for customers, and grow the operations beyond South Africa".
Earthchild CEO Jonathan Katz, who together with Jared Kahn, the chief operating and financial officer, would continue in their current roles, said he was delighted to be partnering with Truworths as the Earthchild business entered the next phase of its recent growth trajectory.
"As one of the founders of the business I am proud to have worked alongside a passionate and capable team, and developed the Earthchild and Earthaddict brands to their well-regarded position in the children's and ladies apparel market. I look forward to working with Truworths to further expand the footprint of the business," said Katz.
Truworths will periodically provide further information to investors on the proposed acquisition during the course of the coming months.
Earthchild is a retailer of fashionable children's and ladies clothing and associated apparel under the Earthchild and Earthaddict brands.
"A relaxed natural philosophy is at the heart of both brands, and the company manages a network of 43 stores in premier shopping malls and retail districts throughout South Africa," said Truworths in a Sens statement.
"Founded in 1994, Earthchild operates from a design and distribution centre headquartered in Cape Town, and has grown its retail presence markedly in the past four years by leveraging its brand values of quality, comfort, natural organic fabrics and social responsibility."
The proposed acquisition is conditional upon satisfactory findings from a due diligence investigation, the execution of written agreements typical of a transaction of this nature and the required regulatory approvals, amongst other conditions.
The transaction falls below the threshold of a categorised transaction in terms of the JSE listings requirements, and the parties have agreed not to disclose the purchase consideration, which is to be settled in cash.
The effective date of the acquisition is expected to be in the first quarter of 2015 and key executives of Earthchild, who are amongst its shareholders, have agreed to remain in its employ at least until the conclusion of the three year earn-out period relating to a portion of the purchase consideration.
Truworths CEO Michael Mark said Earthchild would add an important new dimension to the Truworths portfolio of fashion retailing interests.
"I am excited by the intended acquisition of the Earthchild and Earthaddict businesses, which have great growth prospects and which, together with our rapidly expanding LTD Kids business, reinforce our growth prospects in this area of the market," said Mark.
"We are committed to providing the necessary financial and other resources to increase the number of Earthchild and Earthaddict stores relatively rapidly, introduce a credit facility for customers, and grow the operations beyond South Africa".
Earthchild CEO Jonathan Katz, who together with Jared Kahn, the chief operating and financial officer, would continue in their current roles, said he was delighted to be partnering with Truworths as the Earthchild business entered the next phase of its recent growth trajectory.
"As one of the founders of the business I am proud to have worked alongside a passionate and capable team, and developed the Earthchild and Earthaddict brands to their well-regarded position in the children's and ladies apparel market. I look forward to working with Truworths to further expand the footprint of the business," said Katz.
Truworths will periodically provide further information to investors on the proposed acquisition during the course of the coming months.
