South African Health and wellness group Ascendis Health said on Thursday it will sell three businesses within its Biosciences division to a consortium for R480 million ($33 million) as part of a strategic review.
Ascendis will sell the Efekto, Marltons and Afrikelp businesses to a consortium comprising of RMB Ventures, Nedbank Private Equity and certain members of the management of the Ascendis Biosciences division, it said in a statement.
“Following our strategic business review last year the Biosciences division was considered as non-core to the group’s strategy and was identified for sale,” Chief Executive Thomas Thomsen said.
“While these Biosciences businesses are performing well, they serve a different set of customers and require capabilities and skills that are not core to Ascendis Health.”
Ascendis shares jumped nearly 8% after the announcement and closed up 1.58% at R4.50.
Efekto manufactures and sells home and garden pesticides, fertiliser and plant food products and Afrikelp specialises in natural growth stimulants extracted from seaweed to improve the quality and quantity of agricultural crops.
Marltons, established over 80 years ago, manufactures and distributes pet care and pet products.
Thomsen said the cash proceeds from the sale will strengthen the group’s financial position in the short-term and be used to reduce debt levels and fund working capital.
Ascendis, which also has operations in Cyprus, Hungary, Romania and Spain, said the remaining businesses in the Biosciences division, Avima and Klub M5, may be considered for divestment in the short-to medium-term.
The group has been divesting non-core assets as part of a strategic review aimed at improving cash generation, enhancing profitability and accelerating organic growth.
It announced the sale of its pharmaceutical manufacturing facility in Gauteng for R130 million in December. This followed the sale of its South African sports nutrition business for R54 million in September.
In January, the group received an unsolicited offer for its Cyprus-based generic pharmaceutical business Remedica.