Obtala announced the acquisition of WoodBois (WBI) through Argento, its 75% owned forestry subsidiary, for $14.8m (approximately £11.4m).

Argento said it would acquire 100% of the share capital of WBI, including all land, fixed assets, inventory and the forestry concessions in Gabon.

The immediate plan would be to accelerate the expansion of WBI's sawmill (current annual capacity of 24,000m³ sawn timber) and complete the upgrade of their veneer facility (planned annual capacity of 18,000m³ veneer) within 2017.

Expansion of both business lines was estimated to cost ~$500,000 in capex.

Historically investment in production came primarily from funds generated by WBI's trading business, whose growth was limited only by access to capital and trade finance that Obtala can source.

WBI's founder directors, Zahid Abbas and Jacob Hansen, each of whom were former DLH Group executives with over 20 years' experience in African timber sales and procurement, would remain with Obtala for a minimum offive years, while Hadi Ghossein, a former diplomat and Gabonese citizen who manages operations in Gabon, committed to a minimum of three years.

Obtala would acquire WBI, for $14.8m to be satisfied by a mixture of cash and new Obtala ordinary shares payable in three tranches, subject to satisfactory completion of Obtala's due diligence:

- Tranche 1: Initial cash consideration of $3 (approximately £2.31m); and the issue of 15,641,499 new Obtala ordinary shares within five business days of completion of the due diligence period;

- Tranche 2: Further cash consideration of $3m (approximately £2.31m) on the earlier of 30 September 2017 and 120 days after completion; and

- Tranche 3: Deferred cash consideration of $5m (approximately £3.85m) payable over five years in equal quarterly payments commencing 30 September 2017.

The consideration shares to be issued as part of the Tranche 1 consideration, with a value at 19p per share of £2.97m (approximately $3.84m), were subject to a 24 month lock up period, with any disposal subject to Obtala's consent and orderly market provisions.

They represented approximately 5.63% of Obtala's current issued ordinary share capital.

Any shortfall (or excess) in working capital relative to debt assumed on completion, though not expected to be material, would be offset by a purchase price adjustment to Tranche 2 and Tranche 3 payments. Tranche 2 and 3 payments were conditional on the continued employment of WBI's two founder directors, Zahid Abbas and Jacob Hansen.