Bowler Metcalf : Cat 2 Acq by Bowler Plastics P/L (“Bowler Plastics”) of the business &assets of Skye Plastics P/L (“Skye Plastics")

BOWLER METCALF LIMITED

Incorporated in the Republic of South Africa

Registration number 1972/005921/06

Share code: BCF ISIN: ZAE000030797

("the Company")

CATEGORY 2 ACQUISITION BY BOWLER PLASTICS PROPRIETARY LIMITED ("Bowler Plastics") OF THE BUSINESS AND ASSETS OF SKYE PLASTICS PROPRIETARY LIMITED ("Skye Plastics")

1. Introduction
   Shareholders are referred to the voluntary announcement published on SENS on 18 November 2021 ("the Voluntary Announcement") wherein the Company advised that it had, through its wholly- owned subsidiary, Bowler Plastics, entered into a conditional binding offer ("CBO") with Skye Plastics in terms of which Bowler Plastics had proposed to acquire, and Skye Plastics would sell, the business and assets of Skye Plastics as a going concern ("the Acquisition").
   Shareholders are advised that Bowler Plastics and Skye Plastics have concluded the formal sale agreement in respect of the Acquisition ("the Sale Agreement"), as referred to in the Voluntary Announcement. The purchase consideration is R32 599 000, adjusted as detailed in paragraph 4 below ("the Purchase Consideration").
   Skye Plastics is the vendor and neither the entity nor its shareholders nor any of its associates are related parties to the Company as defined in the Listings Requirements of the JSE Limited ("JSE").
2. Description of Skye Plastics
   Skye Plastics, which was established in April 1994, continues today under the same ownership and manufactures rigid plastic packaging of the highest quality. Over the last 28 years, the management team has successfully built and sustained a strong customer and operations team with a step change in growth in the past three years.
3. Rationale for the Acquisition
   The Acquisition will accelerate the expansion of Bowler Plastics into the medical and agricultural packaging sectors. In addition, it provides a platform from which to serve a broader emerging customer base with standard packaging in a changing personal care market. The acquired skills and machine capacity can seamlessly integrate into the various Bowler Plastics operations in support of the overall business growth strategy. It is expected that operational synergies will enhance the profitability of the acquired business.
4. Purchase Consideration and Payment
5. 1. Subject to the adjustments in terms of paragraphs 4.3 and 4.5 below, the Purchase Consideration, which is payable in cash, will be R32 599 000.
   2. The Purchase Consideration will be allocated as follows: R22 435 000 for all the fixed assets and R10 164 000 (which may be adjusted in terms of paragraph 4.3 below) for the stock.
   3. If the value of the stock at the Effective Date as defined in paragraph 9 below ("Effective Date"), is less than R10 164 000, then the Purchase Consideration will be decreased by the

amount by which it is less, and if it is more than R10 164 000, then the Purchase Consideration will be increased by the amount by which it is more.

1. 1. The Purchase Consideration for the fixed assets and stock (as may be adjusted in terms of paragraph 4.3 above), shall be paid on the closing date, being the 5th business day after the Effective Date.
   2. Subject to the remaining provisions of this paragraph 4.5 and paragraph 4.6 below, the Purchase Consideration may be increased by up to R5 000 000 if the Skye Business Lines
      Revenue ("SBLR"), measured over any consecutive 12 month period (commencing on the Effective Date and ending on 30 June 2023), is more than R87 000 000). The Purchase Consideration increase will be calculated on a straight-line proportional basis for SBLR from R87 000 000 to R110 000 000, with the maximum amount of R5 000 000 being payable should the SBLR achieve R110 000 000 or more.
   3. The SBLR will be in respect of revenue generated i) from existing Skye Plastics products and moulds and ii) from new products and moulds resulting from capital expenditure allocated in the ordinary course of business.
   4. The Sale Agreement has been structured as a sale of an enterprise as a going concern, as envisaged by Section 11(1)(e) of the Value Added Tax Act, 1991. This ensures that the Acquisition will be zero-rated for VAT purposes.
2. Suspensive Conditions
   All the suspensive conditions to the Acquisition, the salient ones of which were included in the Voluntary Announcement, have been fulfilled or waived and the Acquisition is therefore unconditional.
   Approval by the Competition Commission will not be required as the Acquisition is classified as a small merger, and no compulsory notification is therefore required.
3. Classification of the Acquisition
   Since the date of the publication of the Voluntary Announcement, the Acquisition now constitutes a Category 2 transaction in terms of the JSE Listings Requirements which does not require approval from the Company's shareholders.
4. Other Salient Terms and Warranties of the Sale Agreement
5. 1. The employment of all Skye Plastics staff who have contracted with Bowler Plastics, will be transferred from the Effective Date of the Acquisition (see paragraph 9 below).
   2. Skye Plastics, its Managing Director and Operational Director will be subject to restraints of trade which are standard for a transaction of this nature.
   3. The Sale Agreement contains representations and warranties by Skye Plastics in favour of Bowler Plastics which are standard for a transaction of this nature.
6. Financial Information
   The value of the fixed assets and stock of Skye Plastics as at 30 June 2021 was R26 113 000.
   While the audited profits after tax of Skye Plastics for the year ended 30 June 2021 was R1 989 000, consideration has been given to the significant synergies that will come into play upon the integration of Skye Plastics into Bowler Plastics.

The above financial information was extracted from the audited annual financial statements of Skye Plastics for the year ended 30 June 2021 which were prepared in terms of IFRS for Small and Medium Enterprises. The financial statements were audited by CHF & Co, without any modification or qualification.

Bowler Plastics is satisfied with the quality of the audited financial statements from which the financial information was extracted.

1. Effective Date of the Acquisition
   The Effective Date of the Acquisition is 1 March 2022.
2. Other
   The Company confirms, for purposes of paragraph 9.16 of the JSE Listings Requirements, that nothing in the constitutional documents of Skye Plastics will, in any way, frustrate or relieve the Company from compliance with the JSE Listings Requirements.

CAPE TOWN

2 March 2022

Sponsor

AcaciaCap Advisors Proprietary Limited