| Wed 10 Oct 2007, 8:00 | | SIC - Safic Holdings - Acquisition of Centurion Gl |
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SIC
SIC
SIC - Safic Holdings - Acquisition of Centurion Glass and Alluminium and
withdrawal of cautionary announcement
SAFIC Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2004/029691/06)
(JSE code: SIC ISIN: ZAE000088068)
("Safic Holdings" or "the company")
ACQUISITION OF CENTURION GLASS AND ALLUMINIUM AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
1 INTRODUCTION
Shareholders are referred to the cautionary announcements dated 14 June 2007, 27
July 2007 and 7 September 2007.
Safic has, subject to the conditions precedent set out below, purchased all the
issued shares in and the shareholders claims against Silver Falcon Trading 12
(Proprietary) Limited, trading as Centurion Glass and Aluminium ("CGA") from the
shareholders of CGA ("the Sellers") ("the proposed acquisition"). The
shareholders of CGA are the trustees of the KJA Share Trust, Alexander James
Kerrod, Christiaan Willem Moller, Louis Noeth and Schalk Jahn Olivier ("the
vendors").
2 RATIONALE
Safic is a manufacturer, provider and marketer of chemical cleaning and flooring
solutions for the engineering, mining, hospitality sectors and government
departments. Safic currently services a range of customers that include
government, parastatals and blue chip companies as well as small and medium size
enterprises.
More than 70% of Safic`s earnings result from flooring solutions, a division
influenced by the construction boom. The acquisition of CGA will expand Safic`s
construction related products, increasing the range of finishing products
offered to the market.
3 DESCRIPTION OF CGA`s BUSINESS
CGA is a manufacturer and / or fabricator and installer of purpose made
architectural aluminium section and glass facades, shop fronts, windows and
doors as well as aluminium composite panel cladding for the commercial, retail
and top-end residential markets.
CGA has developed a strong presence on a national basis within South Africa from
the northern provinces to the south coast of Kwa-Zulu Natal and has in the past
completed various once-off projects in neighbouring countries Mozambique,
Botswana and Swaziland.
4 TERMS AND CONDITIONS OF THE PROPOSED ACQUISITION
On 9 October 2007 Safic concluded an agreement for the purchase of CGA, subject
to the fulfilment of the conditions precedent in 6 below, witth effect from 1
September 2007. The purchase consideration for all the issued share capital in
and the shareholders claims on loan account against CGA is a maximum of R 75
million which will be payable as follows:
* an amount of R40 million payable after fulfilment of all the conditions
precedent as listed in 6 below and payable as to R 20 million in cash with
the balance being issued in 10 471 204 new ordinary Safic shares at 191
cents per share;
* an amount equal to the 28 February 2008 CGA profits after tax ("2008 PAT"),
multiplied by six, less the initial R40 million payment, payable upon
finalisation of the 2008 PAT of CGA, 50% in cash and the balance by the
issue of new ordinary Safic shares at 191 cents per shares.
The vendors (other than the KJA Share Trust) have signed service and restraint
of trade agreements with CGA.
5 FUNDING OF THE PROPOSED ACQUISITION
The cash portion of the purchase price will be funded through the existing cash
resources of the company.
6 CONDITIONS PRECEDENT TO THE PREPOSED ACQUISITION
The proposed acquisition is subject to the fulfilment of the following
conditions precedent:
- Safic obtaining all the necessary regulatory approvals, including
Competition Commission approval;
- Safic completes a due diligence to its satisfaction on CGA;
- the counterparties to designated material contracts with CGA consent to the
proposed acquisition;
- CGA and the Stallion Trust enter into an agreement whereby CGA acquires the
assets of the Stallion Trust on terms and conditions approved by Safic;
- CGA enters into a new lease contract in respect of the main property
occupied by CGA on terms and conditions approved by Safic;
- termination of existing suretyship given by CGA on behalf of the Stallion
Trust to a bank.
7 PRO FORMA FINANCIAL EFFECTS
The unaudited pro forma financial effects are provided for illustrative purposes
only to provide information about how the acquisition of CGA may have impacted
on Safic`s results and financial position. Due to the nature of the unaudited
pro forma financial information, it may not give a fair presentation of the
group`s results and financial position after the acquisition of CGA.
The unaudited pro forma financial effects are based on the audited financial
information for the year ended 30 June 2007 as announced on SENS on 26 September
2007.
The unaudited pro forma financial effects have been included in terms of the JSE
Listings Requirements. The directors of Safic are responsible for the
preparation of the unaudited pro forma financial effects.
Audited Unaudited pro % Change
results for forma after
the year ended the
30 June 2007 acquisition 30
June 2007
Earnings per share (cents) 15.62 21.49 38%
(1)
Headline earnings per share 16.56 22.23 34%
(cents) (1)
Net asset value per share 116 131 13%
(cents) (2)
Net tangible asset value per 73 31 (57%)
share (cents) (2)
Shares in issue (3) 75 186 521 94 820 029
Notes:
1 The unaudited pro forma financial effects on the results were prepared on
the basis that the acquisition of CGA was completed on 1 July 2006.
2 The unaudited pro forma financial effects on the financial position were
prepared on the basis that the acquisition of CGA was completed on 30 June
2007.
3 Assumed that 10 471 204 new ordinary Safic shares will be issued to the
vendors in settling part of the purchase consideration.
4 Assumed that profit targets will be met and additional 9 162 304 shares
were issued to the vendors on 30 June 2007 (for NAV and NTAV calculations)
and 1 July 2006 (for EPS and HEPS calculations).
5 Goodwill of approximately R63 million will arise on the acquisition.
8 WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Caution is no longer required to be exercised by shareholders when dealing in
their securities.
9 FURTHER ANNOUNCEMENT
Shareholders will be notified once the proposed acquisition has become
unconditional.
Johannesburg
10 October 2007
Designated adviser Exchange Sponsors
Attorneys for Safic Knowles Husain Lindsay Inc
Attorneys for CGA Routledge Modise
Date: 10/10/2007 08:00:01 Produced by the JSE SENS Department.
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