| Thu 21 Feb 2008, 17:05 | | EXL - Excellerate - Acquisition |
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EXL
EXL
EXL - Excellerate - Acquisition
Excellerate Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/009884/06)
Share code: EXL ISIN: ZAE000026092
("Excellerate")
ACQUISITION BY EXCELLERATE INVESTMENT HOLDINGS (PROPRIETARY) LIMITED
("EXCELLERATE INVESTMENT") OF A 50% SHAREHOLDING IN FRIEDSHELF 702
(PROPRIETARY) LIMITED (TO BE RENAMED CHATTELS INFRASTRUCTURE MANAGEMENT
(PROPRIETARY) LIMITED) ("CHATTELS")
1. INTRODUCTION
Further to the cautionary announcements dated 15 October 2007, 26 November 2007
and 7 January 2008, shareholders are advised that Excellerate Investment (a
subsidiary of Excellerate) has entered into a Sale of Shares Agreement ("the
Agreement") with Friedshelf 734 (Proprietary) Limited ("Friedshelf") in terms
of which Excellerate Investment will acquire a 50% shareholding in Chattels
from Friedshelf ("the Transaction").
The remaining 50% shareholding in Chattels is held by Mr Paul Clarke, the
Managing Director of Chattels.
2. RELATED PARTY
Shareholders` attention is drawn to the fact that Friedshelf is a 100%
subsidiary of Buffet Investment Services (Proprietary) Limited ("Buffet"). The
shareholding of Buffet is held 100% by the Suikerbos Trust (IT No. 6588 \ 91)
("Suikerbos").
Suikerbos is a trust registered in accordance with the laws of South Africa
and the trustees of which are Messrs P Ditz and A J F Mundell.
The Buffet Group`s shareholding in Excellerate is represented in part by
Suikerbos and the Rooibos Trust (IT No. 1395/00) ("Rooibos") and the Karoobos
Trust (IT No. 5434/03) ("Karoobos"). Rooibos is an investment holding trust
which has as trustees Messrs P Ditz and A J F Mundell.
Karoobos has as trustees Messrs R Stumpf, M E Stumpf and A J F Mundell.
Mr R Stumpf is a non-executive director of Excellerate.
Furthermore, Mr J Wellsted, a director of Chattels, is considered a principle
executive officer of Excellerate.
Accordingly, the Transaction is classified as a small related party transaction
in accordance with section 10.7 of the Listings Requirements of the JSE Limited
("JSE") ("Listings Requirements").
3. FAIRNESS OPINION
In accordance with section 10.7(b) of the Listings Requirements, Excellerate
obtained written confirmation from Barnard Jacobs Mellet Corporate Finance
(Proprietary) Limited that the terms of the Transaction are fair to
shareholders of Excellerate ("the Fairness Opinion").
The Fairness Opinion will be available for inspection at the registered office
of Excellerate (1st Floor, Atholl Square, Cnr Katherine Street and Wierda Road
East, Sandown, 2196) for a period of 28 days from the date of this
announcement.
4. BACKGROUND INFORMATION
Excellerate is listed on the Consumer Services Sector of the Main Board of the
JSE and is focused in the areas of Consumer Services, Trading and Distribution
and Light Manufacturing.
Chattels is an infrastructure solutions company which specialises in the
provision and management of infrastructure for events, projects, the public and
private sector. Infrastructure is provided on a temporary, medium term or
permanent basis.
5. RATIONALE FOR THE TRANSACTION
Chattels is primarily a service based business which combines an element of
light manufacturing. This profile matches Excellerate`s acquisitive strategy.
In addition, Chattels has a solid track record and reputation in its field of
activity, and has good prospects for growth.
6. PURCHASE CONSIDERATION
The aggregate maximum purchase price payable by Excellerate in respect of the
Transaction is R9 900 300, to be settled as follows:
- R9 900 000 by way of injection of cash by way of loan funding into Chattels
on the fulfilment of all resolutive conditions as set out in the Agreement; and
- a nominal value of R300 to be paid in cash to Friedshelf on the fulfilment of
all conditions precedent as defined in the Agreement.
7. EFFECTIVE DATE
The effective date of the Transaction per the Agreement is 1 November 2007,
subject to the successful fulfilment and/or waiver of the resolutive conditions
as defined in the Agreement.
8. RESOLUTIVE CONDITIONS
In terms of the Agreement, the Transaction is conditional upon the fulfilment
and/or waiver of the following resolutive conditions:
- compliance with all regulatory obligations to the extent necessary to effect
the Transaction and, in particular, obtaining the relevant Competition
Commission approval; and
- compliance with the Listings Requirements regarding a small related party
transaction.
9. FINANCIAL EFFECTS
The unaudited pro forma financial effects as set out below have been prepared
for illustrative purposes only to assist the shareholders of Excellerate to
assess the impact of the transaction on the earnings per share ("EPS"),
headline earnings per share ("HEPS"), net asset value per share ("NAVPS") and
tangible net asset value per share ("TNAVPS") of Excellerate.
The pro forma effects have been applied to Excellerate`s income statement and
balance sheet for the year ended 30 June 2007.
These unaudited pro forma financial effects have been disclosed in terms of the
Listings Requirements and because of their nature may not fairly present
Excellerate`s financial position, changes in equity, results of operations or
cash flows.
The unaudited pro forma financial effects are the responsibility of the
directors of Excellerate.
Audited before Pro forma after Change
transaction transaction %
EPS (cents) 8.61 9.84 14.3
HEPS (cents) 8.55 9.78 14.4
NAVPS (cents) 70.60 74.72 5.9
TNAVPS (cents) 45.49 46.35 1.9
Weighted average number of
shares in issue (`000) 192,598 192,598
Shares in issue at year end (`000) 218,895 218,895
Notes:
1. The EPS and HEPS, as set out in the "before" column of the table, are based
on Excellerate`s audited annual financial results for the year ended 30 June
2007.
2. EPS and HEPS effects are based on the following assumptions and information :
a. except to the extent that surplus cash would have been available within the
Excellerate Group, the purchase price of R9 900 300 would have been financed
through borrowings bearing interest at prevailing interest rates;
b. no material costs have been incurred for this transaction; and
c. the total profit attributable to the 50% interest in Chattels acquired by
Excellerate is based on the unaudited management accounts of Chattels for the
year ended 31 December 2007.
3. The NAVPS and TNAVPS, as set out in the "before" column of the table, are
based on Excellerate`s audited annual financial results for the year ended 30
June 2007.
4. NAVPS and TNAVPS effects are based on the following assumptions and
information:
a. except to the extent that surplus cash would have been available within
the Excellerate Group, the purchase price of R9 900 300 would have been
financed through borrowings bearing interest at prevailing interest rates;
b. the tangible net assets attributable to the 50% interest in Chattels
acquired by Excellerate is based on the unaudited management accounts of
Chattels as at 31 December 2007.
10. CAUTIONARY ANNOUNCEMENT
Shareholders are advised that, insofar as the Transaction is concerned, caution
is no longer required to be exercised by them when dealing in their securities.
Johannesburg
21 February 2008
Sponsor and independent expert
BARNARD JACOBS MELLET
Corporate Finance
Date: 21/02/2008 17:05:01 Produced by the JSE SENS Department.
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