| Tue 24 Apr 2007, 17:59 | | VER - VESTOR INVESTMENTS LIMITED - Acquisition of |
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VER
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VER - VESTOR INVESTMENTS LIMITED - Acquisition of convergenet SA
(Proprietary) Limited ("Convergenet Sa") and change in control, proposed
change of name, appointment of Director and renewal of cautionary
announcement
VESTOR INVESTMENTS LIMITED
(formerly Vesta Technology Holdings)
(Incorporated in the Republic of South Africa)
(Registration number 1998/015580/06)
Share code: VER ISIN: ZAE000089595
("Vestor" or "the Company")
ACQUISITION OF CONVERGENET SA (PROPRIETARY) LIMITED ("ConvergeNet SA") AND
CHANGE IN CONTROL, PROPOSED CHANGE OF NAME, APPOINTMENT OF DIRECTOR AND
RENEWAL OF CAUTIONARY ANNOUNCEMENT
ACQUISITION OF CONVERGENET SA (PROPRIETARY) LIMITED AND CHANGE IN CONTROL
Introduction
Further to the announcement relating to a change in control dated 17 April
2007, shareholders are advised that the Company has concluded an agreement
dated 23 April 2007 with Adage Technology Fund SA Limited ("Adage") in
terms of which Vestor will acquire from Adage the entire issued share
capital and claims (the "ConvergeNet SA Equity"), in and against,
ConvergeNet SA ("the Acquisition"). Simultaneously, Adage has acquired
control of Vestor at 6.5 cents per share and an offer to minority
shareholders will be made at 6.5 cents per share. A guarantee has been
provided to the Securities Regulation Panel.
Background to ConvergeNet SA
ConvergeNet SA was established in 2006 as a new, focused Information and
Communication Technology ("ICT") distribution business to serve the
African, southern African and Middle Eastern markets.
The company identified a gap in the provision of leading edge convergent
information and communication technologies to these markets, both from a
product and an expertise perspective, as well as a hitherto inadequately
addressed growing market demand for high quality, certified pre-owned
network hardware.
To comprehensively address these and other market opportunities,
ConvergeNet SA formed relationships with specialist product and technology
providers. These alliances enable ConvergeNet SA to offer specialised,
niche network products as well as high quality, certified pre-owned network
hardware to the market. The result is a differentiated product offering at
a reduced cost of ownership.
Rationale
The Group intends delivering turnkey project solutions, ancillary support
and managed services to the Middle Eastern, African and Southern African
markets. The acquisition of ConvergeNet SA is in line with the Group`s
strategy to acquire appropriate vehicles with which to achieve its vision
of positioning itself as a significant ICT industry player.
ConvergeNet SA was acquired for amongst others, its product relationships,
and key individuals who collectively have the requisite experience,
credentials and relationship capital to give effect to the group strategy.
After the finalisation of Vestor`s intended acquisitions, ConvergeNet SA
will form part of the Group`s product distribution business.
Terms of the Acquisition
The effective date of the acquisition is 01 March 2007.
The purchase consideration price payable to Adage for the ConvergeNet SA
Equity and Claims is R9 100 000 and is to be discharged by Vestor issuing
140 000 000 new Vestor Shares at 6,5 cents per share to Adage.
The acquisition is subject to the following conditions precedent;
confirmation (on terms reasonably acceptable to the Company) of the
Licensors/Distributors in respect of the key licensing and distribution
agreements that the change in control of ConvergeNet SA is commercially
acceptable to such Licensors/Distributors by not later than 30 June 2007;
conclusion of Executive and Restraint of Trade Agreements between
ConvergeNet SA and Adage and certain key Executives of Adage on terms
acceptable to the Company by not later than 30 June 2007;
the approval of the acquisition in terms of the JSE Listing Requirements
for the conclusion and implementation of the acquisition by no later than
31 July 2007.
The acquisition is subject to the normal terms and warranties usual for a
transaction of the nature contemplated. In addition, Adage has concluded a
profit warranty with Vestor relating to ConvergeNet SA`s profitability for
the coming 12 months from the effective date. The profit warranty agreed
to is R1 516 667 after taxation.
Subject to the implementation of the acquisition, ConvergeNet SA`s Articles
of Association will be amended to conform to the Articles of Association of
a listed Company in terms of the JSE Listings Requirements.
The acquisition of ConvergeNet SA will require shareholder approval and,
due to the fact that the directors of Adage have been appointed to the
board of Vestor in the interim, a fair and reasonable opinion on the
acquisition will be obtained. In addition, the Company is busy negotiating
terms for the acquisition of other companies as detailed below and pro
forma financial effects of all the acquisitions will be announced in due
course. Shareholders are advised that the acquisitions will constitute a
reverse takeover and will accordingly, in accordance with the JSE Listings
Requirements, shareholders are cautioned that the continued listing will be
subject to the approval of the JSE.
BOARD APPOINTMENT
With immediate effect the Board of Directors are pleased to announce that
Mr Mpho Innocent Scott has accepted to join the Board of Directors as a Non
- Executive Director.
Mpho is an established business executive and has been a Member of
Parliament for more than nine years. He has chaired various committees in
Parliament and was also part of the Constitutional Assembly that drafted
the final Constitution for South Africa. Mpho has completed various study
tours abroad and has completed various business management courses in South
Africa as well as the Chevron Texaco Leadership Forum in the USA. He is
involved in shipping, technology, energy and petroleum projects and is a
Director and Chairman of various Companies. Mpho resides in South Africa.
PROPOSED CHANGE OF NAME
Subject to the approval of the JSE and shareholders in general meeting, the
company intends changing its name to ConvergeNet Holdings Limited, details
of which will be included in a circular to shareholders in due course.
CIRCULAR TO SHAREHOLDERS
A circular, which will incorporate, inter alia, full details of the
ConvergeNet SA acquisition, as well as the remaining acquisitions, details
of which will be announced shortly, the proposed name change, the change in
control and offer to minority shareholders, will be posted to Vestor`s
Shareholders as soon as the financial effects of all the acquisitions have
been announced.
RENEWAL OF CAUTIONARY ANNOUNCEMENT
Further to the cautionary announcement dated 17 April 2007, shareholders
are advised that negotiations are still in progress regarding additional
acquisitions which, if successfully concluded may have a material effect on
the price of the Company`s securities. Accordingly, shareholders are
advised to continue exercising caution when dealing in the Company`s
securities until all announcements have been made and the consolidated pro
forma financial effects off all the acquisitions have been provided.
Johannesburg
24 April 2007
Sponsors
Arcay Moela Sponsors (Proprietary) Limited
Date: 24/04/2007 17:59:01 Produced by the JSE SENS Department.
