| Wed 31 Oct 2007, 7:30 | | PSV - PSV Holdings - Acquisition Of Engineered Lin |
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PSV
PSV
PSV - PSV Holdings - Acquisition Of Engineered Linings (Pty) Limited And
Withdrawal Of Cautionary
PSV HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1998/004365/06)
(JSE code: PSV ISIN: ZAE000078705)
("PSV" or "the company")
ACQUISITION OF ENGINEERED LININGS (PTY) LIMITED AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the cautionary announcements dated 31 July
2007 and 13 September 2007 and are advised that an agreement has been
signed whereby PSV has purchased all the issued shares in and claims
against Engineered Linings (Pty) Limited ("Engineered Linings") from Bassap
Services Investments (Pty) Limited ("Bassap"), The Tidufran Trust, DH Roy,
WE Craig, PE Hardie and JDT Viljoen ("the vendors") ("the acquisition").
2. THE ACQUISITION
2.1 RATIONALE FOR THE ACQUISITION
The acquisition of Engineered Linings will enhance PSV`s product offering,
customer base and increase its geographical footprint in the rest of
Africa.
2.3 DESCRIPTION OF THE BUSINESS
Engineered Linings specialises in the installation of geo- synthetic liners
for the purpose of containment, environmental protection and corrosion
protection. The principal industries in which it operates are the mining
and waste industry.
2.3.1 TERMS AND CONDITIONS OF THE ACQUISITION
On 26 October 2007 PSV entered into an agreement to purchase, with effect
from 1 October 2007, all the issued share capital in and claims against
Engineered Linings. The purchase consideration, subject to profit
warranties, is the lesser of:
- R40 251 602; or
- if the net asset value of Engineered Linings for the 12 month period ended
30 June 2007 is less than R18 898 658, the purchase price of R40 251 602
will be reduced accordingly.
2.3.2 The purchase price is payable as follows:
2.32.1 Initial payment
R 20 232 744 payable in cash within five days after all the conditions
precedent has been fulfilled and after delivery of the management
accounts for the period 1 July 2007 to 30 September 2007.
2.3.2.2 Second payment
R 5 048 867 payable in cash within seven days after the issue by the
auditors of their determination of the profit after taxation for the
period 1 July 2007 to 28 February 2008.
2.3.2.3 Third payment
R 10 160 514 payable within seven days after the issue by the auditors
of their determination of the profit after taxation for the period 1
March 2008 to 28 February 2009 payable as follows:
- R5 052 876 in cash ; and
- R5 107 638 will be discharged by the issue and allotment of 6 008
986 PSV ordinary shares at an issue price of 85 cents.
2.3.2.4 Fourth payment
R 4 809 476 payable within seven days after the issue by the auditors
of their determination of the profit after taxation for the period 1
March 2009 to 31 August 2009 payable as follows:
R4 809 476 will be discharged by the issue and allotment of 5 658 208
PSV ordinary shares at an issue price of 85 cents.
2.3.5 DH Roy, WE Craig, PE Hardie and JDT Viljoen the executives of Engineered
Linings, have signed restraint and confidentiality agreements with
Engineered Linings for a period of two years.
3. CONDITIONS PRECEDENT TO THE ACQUISITION
The proposed transaction is subject to the fulfilment of the following
conditions precedent:
- completion of a due diligence on the Engineered Linings` business by
PSV to its satisfaction;
- completion of service contracts with executive directors;
- competition Commission approval; and
- approval from all relevant and applicable statutory and regulatory
authorities including JSE approval.
4. UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION
The unaudited pro forma financial effects set out below are provided for
illustrative purposes only to provide information about how the acquisition
may have impacted on PSV`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 acquisition. The unaudited pro
forma financial effects are based on the unaudited financial information of
PSV for the six months ended 31 August 2007. The directors of PSV are
responsible for the preparation of the unaudited pro forma financial
effects.
Before the Pro forma Change
acquisition after the
unaudited acquisition
31 August unaudited
2007 31 August
2007
Earnings per 4.27 4.93 15.35%
share (cents)
Headline earnings 4.26 4.82
per share (cents) 15.56%
Diluted earnings 4.17 4.92
per share (cents) 15.40%
Diluted headline 4.16 4.81
earnings per 15.54%
share (cents)
Net asset value 83.04 82.44 (0.72%)
per share (cents)
Net tangible 29.79 22.54 (24.34%)
asset value per
share (cents)
Weighted average 215 951 227 618
shares in issue
(`000)
Diluted Weighted 220 994 232 661
average shares in
issue (`000)
Number of shares 215 951
in issue 227 618
(`000)
Notes:
1. The unaudited pro forma financial effects on the results were prepared on
the basis that the acquisition was completed on 1 March 2007.
2. The "Before the acquisition" column has been extracted without adjustment,
from the unaudited results of PSV for the six months ended 31 August 2007.
3. The "After the acquisition" earnings and headline earnings per share have
been based on 50% of the audited results of Engineered Linings for the year
ending 30 June 2007.
4. The "After the acquisition" net asset value and net tangible asset value
per share have been adjusted to include the assets of the acquisition and
the estimated transaction costs have been written off against share
premium.
5. Goodwill of approximately R 21 million will arise on the acquisition.
6. Fully diluted earnings per share is based on the assumption that 11 667 193
ordinary shares of R0.85 will be issued if profit warranties are met.
5. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Caution is no longer required to be exercised by shareholders when dealing in
PSV securities.
Johannesburg
30 October 2007
Designated adviser Exchange Sponsors
Attorneys for PSV Fluxmans
Attorneys for Engineered Hofmeyer Herbstein & Gihwala
Linings Inc.
Date: 31/10/2007 07:30:00 Produced by the JSE SENS Department.
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