| Tue 25 Sep 2007, 8:12 | | ADW - African Dawn - Acquisition Of Dumont Healthc |
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ADW
ADW
ADW - African Dawn - Acquisition Of Dumont Healthcare (Pty) Limited
Withdrawal Of Cautionary Announcement
AFRICAN DAWN CAPITAL LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 2003/005353/06)
(JSE code: ADW & ISIN: ZAE000060703)
("African Dawn" or "the company")
- ACQUISITION OF DUMONT HEALTHCARE (PTY) LIMITED
- WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the cautionary announcement dated 6
September 2007.
African Dawn has purchased all the issued shares in and claims against
Dumont Healthcare (Pty) Limited ("Dumont") ("the acquisition") from
messrs Corne van den Berg, Hermanus van den Berg and Stephen Schutz
("collectively referred to as "the sellers").
The acquisition is unconditional. The Dumont shares have been
transferred to African Dawn and the initial payments made.
2. THE ACQUISITION
2.1 RATIONALE FOR THE ACQUISITION
The acquisition of Dumont will result in the diversification of the
short term secured financing loan book of African Dawn and will further
enhance its status as a niche finance provider.
2.2 DESCRIPTION OF DUMONT`S BUSINESS
Dumont conducts the business of providing short term secured loans to
clients in the medical profession by means of inter alia single invoice
discounting, factoring and purchasing of claims, as well as supplying
administration services to such clients. These services will be extended
to include bridging finance in future.
3. TERMS AND CONDITIONS
3.1 On 20 September 2007 African Dawn entered into an agreement with the
sellers to purchase, with effect from 1 September 2007, all the issued
share capital in and claims against Dumont for a purchase consideration
of R11.5 million.
3.2 The purchase price shall be payable as follows:
- R8.05 million in cash on the signature date ("initial payment");
- the balance of R3.45 million by way of shares in African Dawn.
3.3 Gerhardus Petrus Viljoen, the Financial Director of Dumont, is party to
the agreement. He has personally undertaken that certain profit
warranties will be met, in exchange for which Schutz has agreed to
forego R1 150 00 of the purchase price in favour of Viljoen.
3.4 The African Dawn shares will be purchased on the open market by African
Dawn over a period of ten days after the signature date and held in an
account in the names of C. van den Berg and G.P. Viljoen with a
stockbroker nominated by African Dawn. Two thirds of the shares will be
held in the name of C. van den Berg, and the balance in the name of G.P.
Viljoen.
3.5 One third of the shares will be released annually upon the annual profit
warranties being met. If the warranties are not met, the shares to be
released will be reduced proportionately.
3.6 It was warranted that the after tax profit of the Dumont business for
the three financial years up to 28 February 2008, 2009 and 2010 will not
be less than the following amounts respectively: R111 359,67, R1 853
790,22 and R4 484 129,93.
3.7 In case the profit warranties are not met, the number of shares not
released as a result of the proportionate reduction shall be forfeited
on 1 March 2010, in which event African Dawn will sell such shares.
3.8 The agreement contains other standard warranties that are customary in
transactions of this nature.
3.9 African Dawn has undertaken to make a R6 million facility available to
Dumont to expand its business.
3.10 C. van den Berg and G.P. Viljoen have entered into restraint and
confidentiality agreements undertaking to remain in the employ of Dumont
for at least 3 years from the signature date.
3.11 Dumont`s board will in future have 5 directors, 3 of whom will be
nominated by African Dawn.
4. FINANCIAL EFFECTS OF THE ACQUISITION
No financial effects are disclosed as the value of the transaction is
less than 5% of the market capitalisation of African Dawn. The pro forma
effect on the net assets and net tangible assets per share, and earnings
and headline earnings per share is insignificant.
5. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary announcement dated 6
September 2007 and are advised that caution is no longer required when
dealing in the company`s securities.
Johannesburg
25 September 2007
Designated adviser Exchange Sponsors
Attorneys Mageza Le Roux Vivier &
Associates
Auditors Van Dyk & Associates
Date: 25/09/2007 08:12:01 Produced by the JSE SENS Department.
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