Labat Africa put out a statement on the JSE’s SENS news service on 22 November 2024 announcing the acquisition of a majority stake in Classic International Trading Proprietary Limited.

Labat will pay R16,275 million to exiting shareholders by way of 232.5 million ordinary shares at an issue price of R0.07 per share which is on par with the pre-suspension share price of 0.07 cents per share.

The statement says that “As part of the acquisition, Classic undertakes to underwrite the actual and contingent liabilities of Labat on effective date”.

Classic is not yet quite a done deal. It’s contingent on Labat submitting its long overdue annual financials for the past two years to the JSE by 30 November 2024 – and for the JSE to lift its suspension of trading in Labat shares.

The exact nature of Classic’s IT business is not clear from the announcement and an internet search throws up many Classic International results. What is clear – according to disclosed management accounts – is that Classic is a cash-generating business that will immediately put money on the table.

According to Labat’s statement, the Capital Trading acquisition will also generate longer-term profitability of R70 million before tax over the next three years.

It says Classic made a pre-tax profit of R8,9 million In the year ending 28 Feb 2024 and that management accounts showed it showing an R11 million profit for the first eight months of the 2025 financial year. Classic is prepared to put up a profit warranty for F2025.

Labat says “The acquisition represents a significant step for Labat Technology, which has been actively seeking opportunities to diversify and strengthen its portfolio. This division has faced considerable challenges, necessitating a pivot toward the IT and technology sector.

According to the Sens statement:

The transaction offers Labat several key advantages:

   •   Entry into IT Market: Classic International’s expertise provides Labat with a direct pathway into the competitive IT space.

   •   Expansion Potential: Classic International’s profitable track record enables rapid expansion, ensuring sustainable growth for Labat’s technology business.

   •   Ethical and Future-Focused Technology: Labat benefits from the alignment with Classic International’s ethical technology principles, positioning it favourably in the evolving tech landscape.

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