Pharmaceutical group Adcock Ingram has announced the final terms of a R1.3-billion deal that will see an additional 13 percent of the group ceded to black staff and a black economic empowerment consortium.

The latter comprises Kagiso Strategic Investments, a subsidiary of the Kagiso Trust, and Kurisani Youth Development Trust, the investment arm of LoveLife, the national HIV-Aids prevention programme, and Mookodi Pharma Trust.

The transaction will reportedly take the BEE stake in Adcock from 10 percent to 27 percent, providing the group with a level four empowerment status.

Adcock said on Tuesday the transaction will be implemented through a specific issue of 19,458,196 A ordinary shares to a ring-fenced single investment vehicle (BEE-Co) held by the strategic partners, and 6,486,065 B ordinary shares to a trust (the "Employee Trust") for the benefit of qualifying employees.

The A ordinary shares and B ordinary shares will constitute 13 percent of Adcock's total issued shares after their issue.

The A ordinary shares and B ordinary shares will be issued to the following participants ("BEE Participants"):

• The A ordinary shares to BEE-Co, through which Kagiso Strategic Investments III (Proprietary) Limited ("Kagiso") will initially indirectly hold an interest of 6.13 percent, Kurisani Youth Development Trust ("Kurisani") will initially indirectly hold an interest of 2.60 percent and Mookodi Pharma Trust ("Mookodi") will initially indirectly hold an interest of 1.02 percent of Adcock's enlarged issued share capital. BEE-Co will hold a direct interest of 9.75 percent of Adcock's enlarged issued share capital and;

• the B ordinary shares to the Employee Trust, through which qualifying employees (being permanent black employees of Adcock or other members of the Adcock group as at the initial allocation date (being 31 March 2011) and each subsequent anniversary of the initial allocation date until the fourth anniversary of the first allocation date, but excluding any such black employees who are not employed in South Africa, unless such black employees are on secondment outside of South Africa) will participate in the Transaction. The Employee Trust will hold a direct interest of 3.25 percent of Adcock's enlarged issued share capital.

  The Transaction will be funded as follows:

• R93.75 million unencumbered equity contribution collectively by Kagiso, Kurisani and Mookodi (the "strategic partners");
• Upfront discount of R66 million to the BEE Participants;
• R0.65 million grant by Adcock to the Employee Trust and;
• Notional vendor finance to be provided by Adcock with a value of approximately R1161-million.

  A general meeting of shareholders will be held on April 9 to vote on the transaction.