| Tue 20 May 2008, 10:39 | | BIK - Acquisition By Brikor Of Donkerhoek Quartzit |
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BIK
BIK
BIK - Acquisition By Brikor Of Donkerhoek Quartzite (Proprietary) Limited And
Further Cautionary Announcement
BRIKOR LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/013247/06)
JSE code: BIK
ISIN: ZAE000101945
("Brikor" or "the company")
ACQUISITION BY BRIKOR OF DONKERHOEK QUARTZITE (PROPRIETARY) LIMITED AND FURTHER
CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the cautionary announcement, dated 23 April
2008. Shareholders are advised that Brikor has entered into a Sale of
Shares and Cession of Claims Agreement with GJ Niemand ("the vendor"),
Donkerhoek Quartzite (Proprietary) Limited ("Donkerhoek") and Leopont 365
Properties (Proprietary) Limited ("Leopont"), dated 15 May 2008 ("the
agreement"), in terms of which Brikor will acquire the all the shares in
the issued share capital of Donkerhoek and the Leopont Business (comprising
the quarry business conducted as a going concern by Leopont under the name
and style of Donkerhoek, the net profit after tax ("PAT") of Leopont from 1
March 2008 to the effective date and any material contracts and licences)
("the transaction").
2. BACKGROUND INFORMATION
Brikor manufactures clay bricks, roof tiles, pavers and clay pipes at its
manufacturing facilities situated in Nigel, Olifantsfontein, Vereeniging
and Bronkhorstspruit. The Donkerhoek quarry, situated in Pretoria East, is
a quartzite quarry producing sand and stone.
3. RATIONALE FOR THE TRANSACTION
The transaction is in line with Brikor`s growth and vertical integration
strategy, as well as its geographical expansion plan. The transaction will
expand Brikor`s product and service offering in the market, diversify
revenue streams and add critical mass to Brikor. The products offered by
Donkerhoek will increase Brikor`s participation in infra-structual
projects. Brikor also intends to take part in the supply of silica based
stone into the iron and steel industry. The Donkerhoek quarry is
strategically located in Pretoria East.
4. PURCHASE CONSIDERATION
The purchase consideration will be a maximum of R140 million, payable in
cash as follows:
4.1 R10 million, which has already been paid into trust with the attorneys;
4.2 R60 million, plus interest at the prime bank overdraft rate payable from 1
July 2008 to the effective date, if the effective date is after 1 July 2008
on delivery of the Leopont February 2008 PAT;
4.3 A further maximum amount of R70 million, payable by 1 December 2008 as
follows:
- If Donkerhoek`s PAT for the period from 1 June 2008 to 30 November
2008 is less than R5 million, then no further amount will be payable;
- If Donkerhoek`s PAT is more than R5 million for the period from 1 June
2008 to 30 November 2008, then the amount above R5 million will be
multiplied by 7.08 multiplied by 2 (to annualise the PAT), provided
that such amount shall not be higher than R70 million.
5. EFFECTIVE DATE
The transaction will become effective on the first day of the month
following the month during which the Competition Commission approves the
transaction but not later than 1 August 2008.
6. CONDITIONS PRECEDENT
The transaction is conditional, inter alia, upon:
- a satisfactory due diligence investigation;
- approval by the Competition Commission by not later than 31 July 2008;
- an employment contract being concluded between Brikor and the manager
of Donkerhoek in respect of his continued employment up to at least 30
November 2008; and
- compliance with all regulatory obligations to the extent necessary to
effect the transaction.
7. FINANCIAL EFFECTS
The financial effects of the transaction will be published as soon as
possible.
8. CLASSIFICATION OF THE TRANSACTION
The transaction is classified as a Category 2 transaction in terms of the
Listing Requirements of the JSE Limited.
9. FURTHER CAUTIONARY ANNOUNCEMENT
Shareholders are advised to continue exercising caution in dealing in the
company`s securities on the JSE until such time as the financial effects of
the transaction are published.
Johannesburg
20 May 2008
Designated Adviser
Vunani Corporate Finance
Date: 20/05/2008 10:39:01 Produced by the JSE SENS Department.
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