| Wed 12 Mar 2008, 8:00 | | TLM - Telemasters Holdings Limited - Acquisition o |
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TLM
TLM
TLM - Telemasters Holdings Limited - Acquisition of Marketel and withdrawal of
cautionary
TELEMASTERS HOLDINGS LIMITED
formerly Sinvent Investments 96 (Pty) Ltd
(Incorporated in the Republic of South Africa)
(Registration Number: 2006/015734/06)
JSE Code: TLM
ISIN: ZAE000093324
("TeleMasters" or "the Company")
ACQUISITION OF MARKETEL AND WITHDRAWAL OF CAUTIONARY
1. INTRODUCTION
Further to the cautionary announcement of 10 January 2008 and 7 March 2008,
River Group is authorised to announce that TeleMasters Holdings Ltd
("TeleMasters") have executed a definitive agreement ("the Agreement")with Daisy
Street Investments No 62 (Pty) Ltd ("Daisy Street")to acquire 100% of the shares
("the transaction") in Marketel (Pty) Ltd("Marketel")
2. RATIONALE
In line with TeleMasters growth and diversification strategy this transaction
serves as a first step in the development of TeleMasters into a multi-
disciplinary communications management company, specialising in utilising and
implementing the most efficient and cost effective communications methods to
satisfy customer communication needs.
3. THE TRANSACTION
3.1 Acquisition of Marketel
TeleMasters and Daisy Street, the 100% Holding Company of Marketel, have reached
agreement for the acquisition by TeleMasters of all of Daisy Streets`s shares in
and claims against Marketel subject to the fulfillment or waiver of the
following suspensive conditions:
* completion of a satisfactory due diligence;
* approval by the relevant Boards of Marketel, TeleMasters and Daisy
Street;
* key individuals of Marketel entering into written employment agreements and
restraint of trade agreements with TeleMasters;
* to the extent necessary, obtaining the consent to the change in control of
Marketel by third parties to material contracts;
* to the extent necessary obtaining competition commission and other
regulatory approvals for the transaction;
* to the extent necessary, obtaining consent for the transaction from all
regulatory bodies such as the JSE Limited and the Securities Regulating
Panel
3.2 Purchase consideration
The purchase consideration payable by TeleMasters for 100% of Marketel amounts
to R29,554,880 and will be settled as follows:
* by the allotment and issue of 11,562,600 new TeleMasters shares at an
average issue price of R1.50 per share amounting to R17,343,900.
* by the payment of cash of R12,210,980 in 2 installments, first being
R6,300,000 within 7 days of completion date and R5,910,000 on 31 December
2008.
3.3 Profit warranty
Daisy Street have warranted that the Profit After Tax of Marketel will be no
less than R6,000,000 per 12 month period over the next 36 month period. Should
the profits not be achieved then the purchase consideration shall be adjusted
proportionally and a portion of the shares issued shall be adjusted and the cash
payments received by Daisy Street be refunded in part or in total to
TeleMasters.
3.4 Completion date
The Completion date is the first day of the month following the date of
fulfillment of the last Suspensive condition which date shall not be later than
1 August 2008.
4. DESCRIPTION OF THE BUSINESS OF MARKETEL
Marketel holds an ICASA VANS license and is a dominant player in the interactive
Wireless Application Service Provision(`WASP`) market. It is one of South
Africa`s longest running WASPs as well as being Vodacom`s longest standing and
Cell C`s largest WASP.
5. FINANCIAL EFFECTS
The table below sets out the pro forma financial effects of the transaction,
based on TeleMaster`s audited results for the year ended 30 September 2007. The
financial effects are presented for illustrative purposes only and because of
their nature may not give a fair reflection of the company`s results, financial
position and changes in equity after the transaction.
It has been assumed for purposes of the pro forma financial effects that the
above transaction took place with effect from 1 October 2006 for Income
Statement purposes and 30 September 2007 for Balance Sheet purposes. The
directors of TeleMasters are responsible for the preparation of the financial
effects, which have not been reviewed by the auditors.
Before After Change %
Profit/(Loss) per share (cents) 26.95 31.76 17.85
Headline profit/(loss) per share (cents) 26.95 31.76 17.85
Weighted number of shares in issue (`000) 40 853 53 563 31.11
Net asset value per share (cents) 40.44 86.02 46.68
Net tangible asset value per share (cents) 39.68 30.27 (23.71)
The "Before" financial information has been extracted, without adjustment from
the published audited consolidated results of TeleMasters for the twelve months
ended 30 September 2007.
The "After" column represents the effects of the transaction.
The "Change %" column compares the "After" column to the "Before" column.
6. WITHDRAWAL OF CAUTIONARY AND CATEGORISATION
TeleMasters is pleased to announce that the cautionary announcement dated 7
March 2008 is herby withdrawn.
Under the new Listings Requirements of the JSE Limited which came into effect on
15 October 2007, this transaction is a Category 2 transaction.
Designated and Corporate Adviser
River Group
12 March 2008
Date: 12/03/2008 08:00:00 Produced by the JSE SENS Department.
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