Long4Life acquires shoe retailer Rage

ACQUISITION-hungry Long4Life shares yesterday failed to cheer the group’s biggest takeover to date, falling 0.18 percent after the company forked out R3.9 billion in cash and shares to acquire fashion footwear and apparel retailer Rage.

Long4Life said it would pay R2.4bn cash for the deal, R1.5bn of which would be bank debt. It said it would also issue 270 of its ordinary shares at R5.50 per share to Rage shareholders, to take 22.8 percent of its entire issued share capital.

Chief executive Brian Joffe said the group expected the acquisition to yield results immediately.

“We see an opportunity for significant developments in this company’s footwear, apparel and accessory offering,” Joffe said.

“There is also scope for synergies between our existing brands and Rage, which we believe will offer exciting future growth and position Rage for further market penetration,” Joffe said.

Rage has a portfolio of 1.5 million active customers and its more than 550 stores nationwide.

Joffe said the retailer reported revenue of R1.2bn and net profit after tax of R263 million for the year to the end of June. He said the information was sourced from Rage’s unaudited management accounts, which were subject to verification as part of the due-diligence process.

Rage was established in 1999 and is led by Jeffrey Gochin and Merle Gochin. The company has a range of shoe and clothing styles for women and girls, as well as men’s and boys footwear.

Jeffrey, who is chief executive of Rage, said the company had assessed numerous strategic possibilities for the brand’s growth.

“The Long4Life business proposal made the best sense for us in terms of where we want to take the brand, and the areas where we see the market developing,” Gochin said.

“Together with the experienced Long4Life team, we see this as an exciting opportunity to add value for Long4Life shareholders”.

Joffe, who founded food-services provider Bid Corp and industrial conglomerate Bidvest Group, said the multi-billionrand purchase price was informed by the health of Rage’s balance sheet.

Long4Life closed at R5.70.