| Wed 21 Nov 2007, 9:41 | | IFW - InfoWave - The Acquisition Of An Additional |
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IFW
IFW
IFW - InfoWave - The Acquisition Of An Additional 7.5% Interest In Applyit
(Pty) Ltd And 100% Interest In Microzone Investment Holdings (Pty) Ltd
INFOWAVE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/017276/06)
Share Code: IFW & ISIN number: ZAE000016440
("InfoWave" Or "the Company")
THE ACQUISITION OF AN ADDITIONAL 7.5% INTEREST IN APPLYIT (PTY) LTD AND
100% INTEREST IN MICROZONE INVESTMENT HOLDINGS (PTY) LTD
1. Introduction
The board of InfoWave is pleased to announce that it has reached an
agreement with Mr S Shabalala to acquire his 100% equity interest in
Microzone Investment Holdings (Pty) Ltd ("Microzone") and his 7.5% direct
interest in ApplyIT (Pty) Ltd ("ApplyIT") for a total consideration of
R11.7 million ("transaction").
Microzone holds a 67% interest in Adapt-IT (Pty) Ltd ("Adapt-IT), and a 70%
interest in Isizinda Consulting (Pty) Ltd ("Isizinda") (collectively
including Apply-IT, "Shabalala businesses"). The effective date for the
transaction is 1 December 2007.
InfoWave already holds a 33% interest in Adapt-IT and a 66.9% interest in
ApplyIT. Accordingly on completion, InfoWave will have a 100% interest in
Adapt-IT, a 74.4% effective interest in ApplyIT, and a 70% interest in
Isizinda. The Articles of Association of the Shabalala businesses will be
amended to conform to schedule 10 of the JSE Limited ("JSE") Listings
Requirements and in line with those of the company.
2. Settlement of the transaction
The total consideration for the transaction, which is R11.7 million, will
be settled by the transfer to Mr Shabalala of 16 488 772 InfoWave shares at
an issue price of 71 cents per share, 5.6 million being treasury shares and
the balance being an issue of new ordinary shares. Mr Shabalala`s effective
stake in InfoWave post the transaction will be 16.9%.
3. Rationale for the transaction
In parallel with pursuing organic growth, InfoWave`s stated strategy is to
diversify through acquisitive growth. This acquisition is in line with the
stated strategy and also brings a number of synergies between the operating
entities within the InfoWave group as well as opportunities to cross sell
niche manufacturing IT solutions and broader services across a wider client
base.
The BEE status of the group will be further enhanced by virtue of the
transaction resulting in an increase in the effective Black ownership from
23% to 37.8%. During the implementation of the transaction, Mr Shabalala
will be elected to the board of InfoWave as the Chief Executive Officer
"(CEO"). Ms T Dunsdon, the current CEO, will become the Commercial Director
of the company.
4. Information regarding Shabalala businesses
Adapt-IT was formed in 2004. It is a successful provider of innovative
information management solutions based on best practise open source and
proprietary platforms. The business turns over approximately R9.6 million
per annum and has excellent growth prospects.
ApplyIT was formed in 2000. It develops specialised software to meet the
needs of the process manufacturing sector, predominantly in the areas of
safety, health, environment and quality as well as planned maintenance.
ApplyIT prides itself on the quality of its niche products and services.
Isizinda was formed in 2004. It is a provider of IT consulting services,
predominantly in the ERP market.
5. Categorisation of the transaction
This is a Category 2 transaction as defined in Section 9.5(a) of the
Listing Requirements of the JSE.
6. Conditions precedent
The acquisition is subject to certain conditions precedent that are
considered normal for a transaction of this nature. The application will be
made to the JSE for the listing of the 16 488 772 consideration shares.
7. Pro forma financial information
The unaudited pro forma financial effects of the transaction on InfoWave`s
earnings per share ("EPS"), headline earnings per share ("HEPS"), net asset
value ("NAV") and net tangible asset value ("NTAV") are set out below. The
financial effects have been prepared for illustrative purposes only.
Because of its nature, the pro forma financial information may not fairly
present the group`s financial position and results of operations after the
acquisition. The unaudited pro forma information is the responsibility of
InfoWave`s directors.
Before the After the Change
acquisition acquisition %
(cents)1 (cents)
EPS 3.55 3.782 6.4%
HEPS 3.55 3.782 6.4%
NAV 18.31 23.723 29.5%
NTAV 17.30 12.673 -26.8%
Number of 80 969 694 97 458 4674
shares in
issue
Treasury 5 605 000 nil
shares
Notes
1. Based on the published unaudited interim results of InfoWave for
the six months ended 31 August 2007
2. The pro-forma EPS and HEPS illustrate the possible effects had
the acquisition been implemented on 1 March 2007 by incorporating
the unaudited earnings of Shabalala businesses for the six months
ended 31 August 2007;
3. The pro-forma NAV and NTAV, illustrate the possible effects had
the acquisition been effected on 31 August 2007 by including the
unaudited balance sheet of Shabalala businesses at that date.
4. Including the shares to be issued in settlement of the
transaction.
8. Change of company name
As part of the transaction, the company will propose to its shareholders a
change of the company name from InfoWave Holdings Limited to AdaptIT
Holdings Limited. A circular to shareholders containing the resolution to
that effect will be issued in due course.
Durban
21 November 2007
SPONSOR
SASFIN CAPITAL
A DIVISION OF SASFIN BANK LIMITED
Date: 21/11/2007 09:41:47 Produced by the JSE SENS Department.
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