Cashbuild Limited (JSE:CSB) entered into an agreement to acquire The Building Company (Pty) Ltd from Pepkor Holdings Limited (JSE:PPH) for ZAR 1.1 billion on August 3, 2020. The purchase consideration is subject to an adjustment of an escalation rate of 5.5% per annum from January 1, 2021 until the transaction closing date, with the sum of total consideration and the the total escalation not exceeding ZAR 1.12 billion. During the 12 months ended March 31, 2020, The Building Company generated revenues of ZAR 8 billion. The transaction is subject to approval from regulatory and competition authorities, and Cashbuild's debt financing agreements being duly executed. As of filling on May 28, 2021, the Competition Commission recommendation that the transaction be prohibited as, in their view, the merger will result in a substantial prevention or lessening of competition in the market for building materials, hardware and related products in South Africa. It should be noted that this is only a recommendation at this stage and the Competition Tribunal must still hear arguments from all parties before determining a ruling. Pepkor intends to use the proceeds to settle debt. FirstRand Bank Limited acted as financial advisor and Werkmans Attorneys acted as legal advisor to Pepkor. Investec Bank Limited banking acted as Financial Advisor and Transaction Sponsor to Cashbuild. Webber Wentze acted as legal advisor to Cashbuild. The transaction is expected to close in 2021.

Cashbuild Limited (JSE:CSB) cancelled the acquisition of The Building Company (Pty) Ltd from Pepkor Holdings Limited (JSE:PPH) on August 12, 2021. The approval of the Transaction by the Competition Authorities remains a material outstanding suspensive condition which would not have been fulfilled by the Transaction long stop date of 16 August 2021 (“Long Stop Date”). As a result of Pepkor and Cashbuild not being able to reach agreement on an extension to the Long Stop Date, the parties have accordingly agreed to terminate the Transaction.