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ACD
ACD
ACD - Alliance Data - Acquisition And Withdrawal Of Cautionary Announcement
ALLIANCE DATA CORPORATION LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1997/013402/06)
(JSE code: ACD ISIN: ZAE000065165)
("Alliance Data" or "the company")
- ACQUISITION OF MELFIX & SUPPLIERS (PTY) LIMITED AND THANDA BANTU PROJECTS
(PTY) LIMITED;
- ACQUISITION OF PROPERTY FROM BAY TOWER PROPERTIES 7 CC; AND
- WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the cautionary announcements dated 16 January 2007,
7 March 2007 and 10 May 2007.
Alliance Data has purchased all the issued shares in and claims against MelFix &
Suppliers (Pty) Limited ("MelFix") and Thanda Bantu Projects (Pty) Limited
("Thanda Bantu") ("the engineering acquisitions") from Jacobus Wasserman, Johan
Els, Frederick Wasserman and Alwyn Steenkamp ("the vendors"). As part of the
acquisitions Alliance Data has agreed to purchase Erf 4904, Carltonville Ext 6
Township ("property") from Bay Tower Properties 7 CC ("Bay Tower") ("the
property acquisition"). The engineering acquisitions and the property
acquisition are jointly referred to hereafter as "the acquisitions".
In terms of the Listings Requirements of the JSE Limited ("JSE") the
acquisitions are classified as category 3 transactions.
2. THE ACQUISITIONS
2.1 RATIONALE FOR THE ACQUISITIONS
Alliance Data plans to expand its mining related interests and earnings .The
engineering acquisitions will significantly strengthen the mining platform of
the group and also allow Alliance Data to take advantage of the synergies
between the group`s current mining related activities and that of the
acquisitions through selling into their respective customer bases.
The rationale for property acquisition is that it is the premises of Melfix and
Thanda Bantu.
2.2 DESCRIPTION OF THE BUSINESSES
MelFix and Thanda Bantu provide turnkey solutions in the mechanical, civil and
electrical engineering fields specifically focused at the mining industry. They
design procurement installations for various projects, provide unskilled and
professional personnel to the mines and labour brokers and are involved in
project management.
2.3 TERMS AND CONDITIONS OF THE ENGINEERING ACQUISITIONS
2.3.1 On 18 June 2007 Alliance Data entered into an agreement to purchase,
with effect from 1 March 2006, all the issued share capital in and claims
against MelFix and Thanda Bantu. The purchase consideration is R31 million.
2.3.2 The purchase price is payable as follows:
2.3.2.1 An amount of R 4 million payable in cash on the closing date;
A further sum of R22 million will be discharged by the issue and allotment of 7
333 333 Alliance Data Corporation ordinary shares at an issue price of R3.00 per
ordinary share;
2.3.2.2 The balance of R5 million is payable in cash 6 months after the
closing date.
2.3.3 Alliance Data has completed a due diligence investigation on MelFix
and Thanda Buntu to its satisfaction.
2.3.4 The vendors have agreed not to dispose of any of the Alliance Data
Corporation shares issued to them until 1 March 2009.
2.3.5 The vendors have signed service agreements with MelFix to be employed
until at least 1 March 2008.
2.4 TERMS AND CONDITIONS OF THE PROPERTY ACQUISITION
2.4.1 On 18 June 2007 Alliance Data entered into an agreement to purchase
the property from Bay Tower for an amount of R 4,0 million.
2.4.2 The purchase price is payable on date of transfer which is also the
date from which Alliance Data will take occupation.
3. UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITIONS
The unaudited pro forma financial effects set out below are provided for
illustrative purposes only to provide information about how the acquisitions may
have impacted on Alliance Data`s results and financial position. The pro forma
financial effects have been prepared in accordance with International Financial
Reporting Standards. Due to the nature of the unaudited pro forma financial
information, it may not give a fair presentation of the company`s results and
financial position after the acquisitions. The unaudited pro forma financial
effects are based on the reviewed interim financial information of Alliance Data
at 31 August 2006. The directors of Alliance Data are responsible for the
preparation of the unaudited pro forma financial effects.
Before the Pro forma Change
acquisition After the
s reviewed acquisitions
interim unaudited
31 August 31 August
2006 2006
Earnings per 26.90 24.97 -7%
share (cents)
Headline earnings 26.90 24.97 -7%
per share (cents)
Net asset value 113 134.14 19%
per share (cents)
Net tangible 64 34.56 -46%
asset value per
share (cents)
Weighted average 29 166 666 36 499 999
shares in issue
(`000)
Shares in issue 32 500 000 39 833 333
at period end
(`000)
Notes:
(1) The unaudited pro forma financial effects on the results were prepared on
the basis that the acquisitions were completed on 1 March 2006.
(2) The "Before the acquisitions" column has been extracted without adjustment,
from the reviewed interim results of Alliance Data for the six months ended 31
August 2006.
(3) The "After the acquisitions" earnings and headline earnings per share have
been based on 50% of the MelFix`s and Thanda Bantu`s audited results for the
year ending 28 February 2006.
(4) The "After the acquisitions" net asset value and net tangible asset value
per share have been adjusted to include the assets of the acquisitions and the
estimated transaction costs have been written off against share premium.
(5) Goodwill of approximately R28,3 million will arise on the acquisitions.
4. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Caution is no longer required to be exercised by shareholders when dealing in
their securities.
Johannesburg
19 June 2007
Designated adviser Exchange Sponsors
Auditors Sizwe Ntsaluba
Attorneys Fluxmans Attorneys
Date: 19/06/2007 14:00:48 Produced by the JSE SENS Department.
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