| Fri 30 Nov 2007, 14:36 | | DLG - Dialogue Group Holdings - Acquisition And Wi |
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DLG
DLG
DLG - Dialogue Group Holdings - Acquisition And Withdrawal Of Cautionary
Announcement
Dialogue Group Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2005/039219/06)
Share code: DLG & ISIN: ZAE000083820
("Dialogue" or "the group")
ACQUISITION BY DIALOGUE OF 50% OF SIBIZE INTERNATIONAL (PTY) LIMITED
("SIBIZE") AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Introduction
Bridge Capital is authorised to announce that following Board Approval on 28
November 2007, Dialogue has entered into an agreement dated 29 November 2007
to acquire 50% of the issued share capital of Sibize from ATIO Corporation
(Pty) Limited ("ATIO") for an acquisition consideration of R47.5 million
("the acquisition consideration") ("the acquisition").
Rationale for the acquisition
The acquisition of Sibize is in line with the group`s expansion strategy and
is a strategic move towards penetrating the public sector market. The
acquisition will give Dialogue a significant platform to rapidly expand its
services into the public sector and provide the group with opportunities to
extract synergies in cost savings, business development and common
infrastructure.
Overview of the acquisition
1. Sibize
Sibize provides contact centre services to provincial and national
government departments. It currently holds contracts to provide contact
centre seats for a number of government departments. Sibize is jointly
owned by Verge Management Services (Pty) Limited and ATIO, each with a
50% interest. The company has been operational since 1 June 2007.
1.1 Details of the acquisition
1.1.1 Acquisition consideration
The acquisition consideration of R47.5 million will be funded through a
combination of cash and the issue of new Dialogue shares. An initial
payment of 30% of the acquisition consideration will be payable within 3
days after the effective date from the group`s existing facilities and
the remaining balance in the form of cash and/or shares at ATIO`s
election, but subject to a maximum of 50% of the purchase price being
payable in cash, and any such payments being after 31 December 2007 but
not later than 30 June 2008, as follows:
* 30% of the purchase price will be paid in shares by no later than 5
February 2008; and
* the remaining balance of 40% the purchase price, due in two equal
instalments, will be paid by no later than 30 June 2008.
In terms of the agreement each of the payments made after 31 December
2007 will be subject to Sibize successfully installing an agreed number
of operational contact centre seats.
The number of Dialogue shares to be issued in settlement of part of the
acquisition consideration will be based on the volume weighted average
share price for the 30 days preceding 20 November 2007.
1.1.2 Conditions precedent
The acquisition is subject to inter alia, the fulfilment of
the following conditions precedent:
* conclusion of a sale and purchase of shares
agreement;
* all statutory and regulatory approvals including but
not limited to the JSE Limited, the Securities
Regulation Panel and the South African Reserve Bank,
to the extent required; and
* Dialogue being satisfied in its sole discretion with
the terms of any funding agreements entered into by
Sibize.
2. Effective date
The effective date of the acquisition will be the business day following
the day on which the last of the conditions precedent is fulfilled.
3. Articles of association
In accordance with paragraph 9.16 of the Listings Requirements, the
articles of association of Sibize will be amended to conform to Schedule
10 of the Listings Requirements.
4. Pro forma financial effects of the acquisition
Set out in the table below are the unaudited pro forma financial effects
of the acquisitions of 51% interests in each of ContinuitySA (Pty)
Limited ("ContinuitySA") (as announced on SENS on 2 August 2007) and
CallForce Direct (Pty) Limited ("CallForce Direct") (as announced on
SENS on 30 August 2007) and the acquisition of 50% of Sibize. The
unaudited pro forma financial effects are presented for illustrative
purposes only, to provide information on the impact of the acquisitions
of 51% interests in each of ContinuitySA and CallForce Direct and the
acquisition of 50% of Sibize. The unaudited pro forma financial effects
are the responsibility of Dialogue`s directors. Due to the nature of
the unaudited pro forma financial effects, they may not give a fair
presentation of Dialogue`s financial position and the results of its
operations after the acquisitions of 51% interests in each of
ContinuitySA and CallForce Direct and the acquisition of 50% of Sibize.
After the
acquisition of
51% of
ContinuitySA and
Unaudited for before the
the 6 months acquisition of
ended 30 June 51% of CallForce
2007 1 Direct and 50% of
Sibize 2
Earnings per share
(cents) 2.8 2.7
Headline earnings per
share (cents)
2.8 2.7
Net asset value per
share (cents)
25.1 25.1
Net tangible asset value
per share (cents)
25.1 1.8
Weighted average number
of shares in issue(000)
210 000 210 000
Actual number of shares
in issue (000)
210 000 210 000
Table continues
After the acquisitions
of 51% interests in After the
each of ContinuitySA acquisitions
and CallForce Direct of 51%
and before the interests in
acquisition of 50% of each of
Sibize 3 ContinuitySA
and CallForce Percentage
Direct and the change 7
acquisition of (%)
50% of Sibize
4
Earnings per
share (cents) 3.0 3.4 +13.3%
Headline
earnings per
share (cents) 3.0 3.4 +13.3%
Net asset value
per share
(cents) 25.1 36.4 +45.0%
Net tangible
asset value per
share (cents) (4.7) (9.5) -102.1%
Weighted average
number of shares
in issue(000)
210 000 236 181
Actual number of
shares in issue
(000)
210 000 236 181
Notes:
1. Extracted from the published unaudited interim results of Dialogue for
the six months ended 30 June 2007.
2. Including the impact of the acquisition of 51% of ContinuitySA. The
ContinuitySA financial information has been extracted from the unaudited
management accounts for the 6 months ended 30 June 2007.
3. Including the impact of the acquisitions of 51% in each of ContinuitySA
and CallForce Direct. The CallForce Direct financial information has
been extracted from the unaudited management accounts for the 6 months
ended 30 June 2007.
4. Including the impact of the acquisitions of 51% interests in each of
ContinuitySA and CallForce Direct and the acquisition of 50% of Sibize.
The Sibize management accounts have been extracted from the unaudited
management accounts for the 5 months ended 31 October 2007.
5. Earnings and headline earnings per share in the "After the acquisitions
of 51% interests in each of ContinuitySA and CallForce Direct and the
acquisition of 50% of Sibize" column have been based on the assumption
that all transactions were effective 1 January 2007.
6. Net asset value and net tangible asset value per share in the "After the
acquisitions of 51% interest in each of ContinuitySA and CallForce
Direct and the acquisition of 50% of Sibize" column have been based on
the assumption that all transactions were effective 30 June 2007.
7. The "percentage change" column reflects the impact of the acquisition of
50% of Sibize and the acquisition of 51% of interest in each of
ContinuitySA and CallForce Direct.
5. Withdrawal of cautionary announcement
As the details of the acquisition have been announced, shareholders are
no longer required to exercise caution when dealing in their Dialogue
shares and accordingly, the cautionary announcement released by Dialogue
on 15 November 2007 is hereby withdrawn.
Cape Town
30 November 2007
Corporate and Designated Advisor: Bridge Capital Advisors (Pty) Limited
Date: 30/11/2007 14:36:47 Produced by the JSE SENS Department.
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implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
