| Thu 13 Dec 2007, 14:47 | | IDE - Ideco - Acquisition Of An Initial 30% Interest In Kroll Background |
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IDE
IDE
IDE - Ideco - Acquisition Of An Initial 30% Interest In Kroll Background
Screening (Pty) Ltd An International Credential Verification Company
Ideco Group Limited
Incorporated in the Republic of South Africa
(Registration number 2001/023463/06)
Share code: IDE & ISIN code: ZAE000107579
("Ideco" or "the Company")
ACQUISITION OF AN INITIAL 30% INTEREST IN KROLL BACKGROUND SCREENING (PTY) LTD
AN INTERNATIONAL CREDENTIAL VERIFICATION COMPANY
1. Introduction
Ideco is pleased to announce that on 11 December 2007, an agreement was signed
regarding the acquisition by the Company of an initial 30% interest in Kroll
Background Screening (Pty) Ltd ("Kroll")("the acquisition"). Ideco has an option
to acquire a further 19% of Kroll within the next 24 months.
In terms of the Listings Requirements of the JSE Limited ("JSE"), the
acquisition is classified as a category two transaction. This announcement is
therefore for information purposes only and no action is required by Ideco
shareholders.
2. Details of the acquisition
2.1 The vendors
The vendors of the shareholding in Kroll are Kroll Associates (Pty) Ltd and
Kroll Background Screening (Pty) Ltd ("the vendors").
The purchase consideration
The purchase consideration in respect of the additional acquisition amounts to
R16 million and will be settled in cash out of existing cash resources.
2.3 The effective date
The effective date of the acquisition is 11 December 2007.
3. Rationale for the acquisition
Kroll specialises in intellectual risk management and is a leading player in the
credentials verification industry in South Africa. Established in 1988, Kroll
was the first, and until recently the only, dedicated corporate verification
agent in South Africa with a well-established reputation amongst its blue-chip
clients. Kroll is a subsidiary of the New York Stock Exchange listed company,
Marsh McLennan Inc, which is the world`s leading independent risk consulting
company, providing a wide range of investigative, financial, security and
technology services to clients. With its access to its holding company`s global
intellectual capital, Kroll is well positioned to maintain its leadership in the
South African market.
Credentials verification is increasingly being viewed by organisations as a
crucial mechanism to confirm the integrity of intellectual capital and manage
business risks and Kroll is the registered trade mark holder of the National
Qualifications Register (NQR), which has agreements with several South African
tertiary education institutions to verify qualifications accurately and quickly.
As such it is ideally positioned to assist its clients in managing risks.
Kroll`s verification and background screening capability includes qualification
verification; membership of professional bodies; credit and criminal records;
driver`s licences and identity verification; reference and fraud listing checks.
Kroll`s range of products and services is complementary to Ideco`s own identity
management products and services. Ideco`s solutions are based on biometrics, in
particular fingerprints, and together Ideco and Kroll have the ability to
enhance the security of the vetting and identity management solutions for their
combined client bases. Cementing Ideco`s relationship with Kroll also presents
Ideco with cross selling opportunities to the respective clients, including
Kroll`s US parent company`s global clients.
Kroll`s criminal record searches, which are currently managed from names and
identity numbers, will be converted to fingerprint searches, on Ideco`s recently
launched AFISwitch, increasing the projected volumes transacted on the switch by
as much as 35% in the next year. Kroll will also be equipped to offer a more
efficient and convenient service to its clients by automating its criminal
recording checking processes while increasing the accuracy of its solutions.
Ideco`s positioning, through partnerships with leading global vendors including
SAGEM and Ideco`s extensive intellectual capital has been further enhanced by
the acquisition of Kroll, which is also a world leader in its field. This marks
an important milestone towards Ideco`s strategic imperative of delivering
shareholder value through participation in the extensive identity management
opportunities, both in South Africa and abroad.
4. Pro forma financial effects of the acquisition
The pro forma financial effects of the acquisition, as presented below, are the
responsibility of the board of Ideco and are presented for illustrative purposes
only to provide information on how the cumulative acquisitions might have
impacted on the reported financial information of the Company if it had been
implemented in the year ended 28 February 2007. Because of their nature, the
pro forma financial effects may not give a fair indication of the Company`s
financial position at 28 February 2007 or its future earnings.
Before the After the % change
acquisition1 acquisition 2 and
3
Basic and headline 10.98 11.50 4.72
earnings per ordinary
share for the year
ended 28 February 2007
(cents)
Net asset value ("NAV") 18.71 19.23 2.77
and net tangible asset
value ("NTAV") per
ordinary share at 28
February 2007 (cents)
Number of ordinary 202 222 222 202 222 222
shares in issue at the
end of the period
Notes:
The figures in this column are extracted from the published audited annual
financial results of the Company for the year ended 28 February 2007.
For the purposes of calculating the financial effects of the acquisition, the
audited annual financial statements of Kroll for the year ended 31 December 2006
have been used to equity account Ideco`s share of the Kroll profits.
The figures in this column are based on the figures set out in the previous
column after the implementation of the acquisition. For purposes of the headline
and basic earnings per ordinary share it was assumed that the acquisitions of a
30% interest in Kroll had been in effect for the year ended 28 February 2007
and, for purposes of net asset value and net tangible asset value per ordinary
share, that it had been implemented on 28 February 2007.
13 December 2007
Bryanston
Designated Advisor
BDO QuestCo (Pty) Ltd
Date: 13/12/2007 14:47:01 Produced by the JSE SENS Department.
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