The acquisition was made by Argento, Obtala’s 75 percent-owned forestry subsidiary, which will pay $14.6 million in three tranches for the company. The first tranche of $3 million, in addition to a new share issue worth $3.59 million, will occur this week; a further consideration of $3 million will be paid on September 30th this year or 120 days after completion of the deal, whichever comes first; and a deferred cash consideration of $5 million will be payable over five years in quarterly payments beginning September 30th this year, according to a statement.
“The acquisition creates immediate synergies and accelerates our plans to become a major contender in sub-Saharan Africa, with positive social impact and sustainability always as prerequisites,” Obtala’s chairman Miles Pelham, said.
Founded in 2004, WoodBois has trading operations in Abidjan, Ivory Coast, where the company leases warehouse space for inventory. The company sources sawn timber from timber producers throughout Africa, and is engaged in the production of sawn timber planks and veneer from its concessions in Gabon, which currently total 96,851 hectares.
WoodBois also owns and operates a sawmill in Gabon, which has a capacity of 42,000 m3. It is also in the process of upgrading an 18,000 m3 veneer factory, in which Obtala will invest an additional $400,000 to complete by year-end.
Obtala chief executive Paul Dolan and chief operating officer Warren Deats have been appointed to the WoodBois board, while WoodBois’ founder directors Zahid Abbas and Jacob Hansen, each of whom are former DLH Group executives, one of the world’s largest timber trading companies, will remain with Obtala.
Hadi Ghossein, a former diplomat and Gabonese citizen who manages WoodBois’ operations in Gabon will serve as chief executive of the new holding company, WoodBois Gabon.
Based in Guernsey, Obtala is a London Stock Exchange AIM-listed company. As of March 24, 2017, its market capitalization stood at $61 million. In 2016, it shed its retail outlets and mining interests to focus on two core areas: sustainable forestry in Mozambique, operating 312,465 hectares; and sustainable agriculture in Tanzania, operating 1,730 hectares.