core sector communique

 

LONRHO Plc

(“Lonrho” or the “Company” or the “Group”)

 

Lonrho Plc acquires services company for Southern Sudan and East Africa

 

Lonrho ( AIM : LONR ) is pleased to announce that it has signed a Sales and Purchase Agreement  to acquire the AFEX Group of Companies ('AFEX') subject to certain conditions, at Lonrho's sole discretion,  being satisfied. AFEX is a service provider based in Kenya that owns and manages secure accommodation based in Kenya and Juba, Southern Sudan. The company also provides management; catering; housekeeping; communications, and internet access, to clients staying at its bases. AFEX also supplies logistical and base support facilities across East Africa to companies that require support for remote operations, such as oil, gas and mineral resource companies, exploration companies and construction companies.

 

Lonrho has purchased 100% of AFEX for an initial cash consideration of US$ 3 million and an EBITDA related, capped earn-out payment of 1.8x EBITDA structured over two years that potentially brings the total purchase price to a maximum of US$ 8.0 million. The existing management of AFEX will remain in place to develop and grow the company during the transitional period.

 

AFEX's main focus of current operations is in supplying secure accommodation in Juba in the Southern Sudan. This infrastructure is in great demand from Corporate clients, NGO's, and Government Aid Agencies working in Southern Sudan. For the year ended 31st December 2009, AFEX reported a profit before taxation of US$ 1.568 million on a turnover of US$ 15,925 million and had as at that date net assets of US$ 8.693million.

 

David Lenigas, Lonrho Executive Chairman commented:

 

'We are delighted to have acquired AFEX. AFEX brings established access to the rapidly developing Southern Sudan market which, following the successful referendum last month, has great potential. AFEX also services the logistics and base requirements of the growing demand from oil, gas and mining companies throughout East Africa. AFEX installs and manages accommodation, IT and building solutions, and is a natural fit with these existing capabilities within the Lonrho Group.'