| Mon 2 Jul 2007, 16:25 | | VER - Vestor - Acquisition of Telesto and renewal |
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VER
VER
VER - Vestor - Acquisition of Telesto 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 TELESTO COMMUNICATIONS (PROPRIETARY) LIMITED ("Telesto") AND
RENEWAL OF CAUTIONARY ANNOUNCEMENT
Introduction
Further to the previous announcements of the acquisitions of ConvergeNet SA
(Proprietary) Limited, Structured Connectivity Solutions (Proprietary) Limited
and Sizwe Africa IT Group (Proprietary) Limited ("Sizwe") and the renewal of
cautionary announcement on 28 May 2007, shareholders are advised that Vestor has
negotiated the conclusion of an agreement dated 18 May 2007 in terms of which
Vestor will acquire, from Russell Cheston Mathey (70%) ("Mathey"), Marco Van
Biljoen (15%) ("Van Biljoen") and The Gary Lauryssen Family Trust (15%)
("Lauryssen"), (together the "Vendors") 74% of the issued share capital in and
claims against, Telesto ("the Acquisition").
Background to Telesto
Telesto was originally established under the name C-Tech in 1999, following the
purchase of the Mosaix predictive dialer division from CMS. Telesto has since
January 1999 focused exclusively on the Predictive Dialer business within the
telephony and voice solutions market in South Africa. The existing client base
has been solidified with the change of distribution from CMS to Telesto, with
improved service and has also resulted in increased seat capacity and product
upgrades.
Telesto focuses exclusively on the AVAYA Predictive Dialer and Agent
Effectiveness Applications from AVAYA for distribution and sale in Sub Saharan
Africa and the Middle East. These systems are widely used in outbound
operations for Call Centres. The most common applications used are Collections,
Telemarketing and Tele-servicing. Customers comprise, inter alia, Woolworths,
Nedbank, Dimension Data and Telkom.
Rationale
Vestor intends delivering turnkey project solutions, ancillary support and
managed services to the Middle Eastern, African and Southern African ICT
markets. The acquisition of Telesto is in line with the Group`s strategy to
acquire appropriate vehicles through which to achieve its vision of positioning
itself as a significant ICT industry player. Telesto holds the Avaya Predictive
Dialer distribution for Sub-Saharan Africa and the Middle East and also provides
ad-hoc consulting services in Europe and Asia.
Terms of the Acquisition
The effective date of the acquisition is 01 March 2007. The purchase
consideration payable is R22 200 000 and is to be discharged by Vestor through
the issue of 74 000 000 new Vestor Shares at 30 cents per share to the Vendors.
Vestor has also granted a put option to the Vendors to put the remaining 26% of
Telesto to Vestor at a purchase price of R7 800 000 to be discharged by the
issue of Vestor shares at a 10% discount to the 30 day average trading price at
the time of exercising of the option, on the condition that Telesto records an
aggregate profit before taxation of R10 500 000 for the two years ending 28
February 2009. Should Telesto record a profit before taxation of more or less
than R10 500 000 for the aggregate of two financial years ending 28 February
2009, the purchase price for the 26% shareholding will be adjusted pro-rata by
the percentage that the aggregate profit of Telesto exceeds or falls below R10
500 000.
In addition Vestor was granted a call option on the remaining Telesto shares by
each of the Vendors on the same terms and conditions as the put option, which
option may be exercised by Vestor at any time against each of the Vendors
concerned, should they cease to be employed by Vestor.
The acquisition is subject to the following conditions:
* That Mathey, Van Biljoen and Lauryssen sign service agreements for two
years as well as a restraint of trade for two years after leaving
employment of Telesto;
* The signing of a shareholders` agreement between the parties before 15
September 2007;
* The parties enter into a put option with Adage Technology Fund SA (Pty) Ltd
("Adage"), the controlling shareholder of Vestor, whereby the Vendors can
put 50% of their consideration shares to Adage at 30 cents per within 30
days after date of approval of the acquisition of Telesto by Vestor
shareholders, failing which 75% of any remaining shareholding will be
locked up for a period of one year from the effective date of acquisition;
* Approval by Regulatory Authorities and in terms of the JSE Listings
Requirements for the conclusion and implementation of the acquisition; and
* the approval of the acquisition of Telesto by Vestor shareholders in a
general meeting.
The acquisition is subject to the normal terms and warranties usual for a
transaction of the nature contemplated.
Subject to the implementation of the acquisition, Telesto`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 Company is finalising pro forma financial effects of all the acquisitions,
which is expected to be announced during the course of the week. Shareholders
are advised that the acquisitions will constitute a reverse takeover and, in
accordance with the JSE Listings Requirements, shareholders are cautioned that
the continued listing will be subject to the approval of the JSE.
CIRCULAR TO SHAREHOLDERS
A circular, which will incorporate, inter alia, full details of the acquisitions
of Telesto, ConvergeNet SA, SCS and Sizwe, the proposed name change, the change
in control and offer to minority shareholders, will be posted to Vestor`s
shareholders in due course.
RENEWAL OF CAUTIONARY ANNOUNCEMENT
Further to the cautionary announcement dated 28 May 2007, shareholders are
advised that pro forma financial effects are in the process of being finalised.
Accordingly, shareholders are advised to continue exercising caution when
dealing in the Company`s securities until all announcements have been made and
the financial information and consolidated pro forma financial effects of all
the acquisitions have been provided.
Johannesburg
02 July 2007
Sponsors
Arcay Moela Sponsors (Proprietary) Limited
Date: 02/07/2007 16:24:59 Produced by the JSE SENS Department.
