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PKH
PKH
PKH - Protech Khuthele Holdings - Acquisitions Announcement - Revised
Financial Effects.
Protech Khuthele Holdings Limited
(formerly M&W Prinsloo Management Services (Pty) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2000/024352/06)
JSE code: PKH ISIN:ZAE000101986
("Protech" or "the Company")
ACQUISITIONS ANNOUNCEMENT - REVISED FINANCIAL EFFECTS.
1. Introduction
Shareholders are referred to the announcement dated 30 November 2007, in which
they were advised of the financial effects of the following acquisitions made by
Protech:
- Instant Concrete Products (Proprietary) Limited ("the Instant Concrete
business");
- Amadou Investments (Proprietary) Limited, Oudema Concrete (Proprietary)
Limited, Rockcrete Readymix (Proprietary) Limited and Rockcrete Transport
(Proprietary) Limited, ("the Rockcrete business"); and
- The premises from which a portion of the Instant Concrete business is
operated ("the fixed property"), which property is owned by Mille Investments
189 (Proprietary) Limited) ("Mille"). Collectively referred to as "the
acquisitions".
The directors advise that the independent valuation of the assets being acquired
has now been completed and accordingly set out below the amended unaudited pro
forma financial effects of the acquisitions.
2. Conditions precedent
Shareholders are further advised that the conditions precedent to the
acquisitions have been met save for:
2.1 Unconditional written approval of the Competition Commission; and
2.2 The conclusion of service and relevant restraint of trade agreements with
identified key management members of the Instant Concrete and Rockcrete
businesses.
3. Funding of acquisitions
The acquisitions will be funded by debt.
4. Amended Unaudited pro forma financial effects of the acquisitions
The directors of Protech are responsible for the unaudited pro forma financial
effects set out below for illustrative purposes only and to provide information
about how the acquisitions may have impacted on Protech`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 Company`s results and financial position
after the acquisitions. The unaudited pro forma financial effects are based on
the reviewed financial information of Protech at 28 February 2007 and are
presented in a manner consistent with the format and accounting policies adopted
by Protech.
4.1 Effect of the acquisitions on the net asset value of Protech
The historical net asset value of the businesses being acquired amounts to
R23.5 million. It must be noted that this net asset value is calculated by
using the audited historical depreciated book values of the assets of the
businesses as at 30 June 2007. In terms of IFRS the assets acquired have been
revalued by independent valuers and will be included in the financial records of
Protech at fair value. The revaluation on the assets amounts to R46.74 million
resulting in goodwill of R26.7 million.
4.2 Effect of the acquisitions on the historical unaudited pro forma results
The historical aggregated after tax earnings of the required businesses as per
their audited financial statements as at 30 June 2007 amount to R8.9 million.
4.3. Effect of acquisitions table
Before the After the Percentage
Acquisitions Acquisitions Change (%)
Earnings per share (cents) 10.3(1) 10.4(3) 1.5%
Headline earnings per share
(cents) 12.0(1) 12.1(3) 1.3%
Net asset value per share
(cents) 22.0(1) 22.0(2) -
Net tangible asset value per 22.0(1) 14.6 34%
Share (cents)
Number of shares in issue
(`000) 362 500 362 500
Weighted average number of
shares (`000) 350 000 350 000
Notes:
1. Extracted from the pre listing statement of Protech issued on 30 July 2007
representing the reviewed pro forma results of the Company for the 12 months
ended 28 February 2007. The pro forma financial effects have been based on
Protech`s reviewed pro forma results for the 12 months ended 28 February 2007 in
order to align them with the audited annual results of the acquisitions.
2. The net asset value per share after the acquisitions was calculated applying
the following assumptions.
a. The value of the net assets acquired is based on the audited book values at
30 June 2007 and adjusted for the fair value of the assets as a result of the
revaluation of property plant and equipment in terms of IFRS. Goodwill of R26.7
million representing the net difference between the revalued net asset amount
and the purchase consideration paid for the assets, has contributed to the
difference between the financial effects as disclosed here and those published
on 30 November 2007.
b. No IFRS 3 impact has been taken account of as the purchase price allocation
exercise is still in progress.
c. The purchase consideration will be funded by debt to the value of R79.4
million.
d. The effective date of the transaction is 28 February 2007.
3. The earnings per share and headline earnings per share calculations in
the "after the acquisitions" column are based on the following assumptions:
a. Earnings were adjusted to reflect the cost related to the debt incurred to
fund the acquisitions charged at an interest rate of 14.5% per annum.
b. The earnings of the acquired businesses are based on the aggregated
historical earnings of all the acquired businesses as they appear in the
audited annual financial statements for the 12 months ended 30 June 2007.
c. Estimated transaction costs amounting to R325 000 have been expensed.
d. The transaction is effective from 1 March 2006.
Johannesburg
14 December 2007
SPONSOR:
Ernst & Young Sponsors (Pty) Ltd
(Registration number 2000/031843/07)
Date: 14/12/2007 16:30:01 Produced by the JSE SENS Department.
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