| Thu 22 May 2008, 10:01 | | ADH - ADvTech - Acquisition |
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ADH
ADH
ADH - ADvTech - Acquisition
ADvTECH Limited
Incorporated in the Republic of South Africa
(Registration number 1990/001119/06)
Share Code: ADH & ISIN: ZAE000031035
("ADvTECH" or "the company")
ACQUISITION BY ADvTECH LIMITED ("ADvTECH") (THROUGH ITS WHOLLY OWNED SUBSIDIARY
THE INDEPENDENT INSTITUTE OF EDUCATION (PTY) LTD ("The IIE") OF THE BUSINESS OF
TRINITYHOUSE SCHOOL ("Trinityhouse") AS A GOING CONCERN
Introduction
ADvTECH is pleased to announce that The IIE, a wholly-owned subsidiary of
ADvTECH has entered into an agreement dated 22 May 2008 in terms of which The
IIE will acquire Trinityhouse from Heron-Mayton Properties (Pty) Ltd
(Registration number 1996/001513/07); Trinityhouse Schools (Pty) Ltd
(Registration number 1996/005066/07); Trinityhouse Pre-Primary School (Pty) Ltd
(Registration number 1999/008428/07); Trinityhouse Pre-Primary School II (Pty)
Ltd (Registration number 2005/012792/07) ("the acquisition").
The Schools Division of ADvTECH offers modern, high quality co-educational
education for students from infancy to Grade 12 in its Junior College, Abbotts
College and CrawfordSchools brands, on both a non-denominational and faith-based
basis.
Trinityhouse was established as a co-educational private school in Johannesburg
in 1997. The school offers quality holistic education, with a balanced sporting
and academic approach from pre-primary through to Grade 12. All grades are
situated at a single campus in Randpark Ridge. Trinityhouse has more than 1 700
students, and the Grade 12`s sit the IEB matric examinations.
Rationale for the acquisition
The acquisition of Trinityhouse will compliment CrawfordSchools and Abbotts
College, by enabling ADvTECH to provide another affordable schooling model,
which appeals to a broader market, specifically in areas where a more
traditional, Christian ethos is preferred.
Furthermore there is the possibility of growing the Trinityhouse model by
investing in Pre-primary, Preparatory and High Schools in other areas due to the
increasing demand for affordable and quality private schooling.
Overview of the acquisition
The IIE will acquire the tangible operating assets (including land and
buildings), intangible assets, goodwill and business excluding the shareholder
loans, taxation and liabilities, as at the effective date of:
Heron-Mayton Properties (Pty) Ltd (Registration number 1996/001513/07);
Trinityhouse Schools (Pty) Ltd (Registration number 1996/005066/07);
Trinityhouse Pre-Primary School (Pty) Ltd (Registration number 1999/008428/07);
Trinityhouse Pre-Primary School II (Pty) Ltd (Registration number
2005/012792/07)
as a going concern, collectively referred to as "Trinityhouse".
Details of the acquisition
Acquisition consideration
The purchase price in respect of the above acquisition will be R 103, 5 million,
payable in cash from ADvTECH`s internal resources.
Conditions precedent
The acquisition is subject to inter alia, the fulfilment of the following
conditions precedent by no later than 15 August 2008:
- the successful completion of a due diligence investigation;
- approval of the acquisition by the Competition authorities in terms of the
Competition Act, or conditional approval on terms and conditions acceptable
to both parties;
- approval from the Local Authority, and insofar as it may be necessary, the
Department of Education and The Independent Examinations Board, to continue
operating the acquired business from the effective date;
It being agreed that the parties shall be entitled to extend the due date for
fulfilment of the conditions precedent provided the aggregate of such extensions
does not exceed 60 (sixty) days.
The acquisition is further subject to resolutive conditions in connection with
the registration of transfer of the immovable property forming part of the
acquisition into the name of The IIE in the appropriate Deeds Registry, and
obtaining any approvals and certificates as may be required by the Local
Authority, by 31 December 2008, or a later date agreed between the parties.
Effective date
The effective date of the acquisition will be either:
- the first business day of the month following the month during which the
conditions precedent are timeously fulfilled and/or waived if such
fulfilment and/or waiver occurs on or after the 16th day of the month
during which the conditions precedent are timeously fulfilled and/or duly
waived; or
- the first business day of the month during which the conditions precedent
are timeously fulfilled and/or waived if such fulfilment or waiver occurs
on or before the 15th day of the month during which the conditions
precedent are timeously fulfilled and or duly waived.
It is anticipated that the conditions precedent will be fulfilled prior to 15
August 2008.
Pro forma financial effects of the acquisition
The unaudited pro forma financial effects of the acquisition are the
responsibility of the directors of ADvTECH and are presented for illustrative
purposes only, to provide information about how the acquisition might impact the
financial results of ADvTECH. Due to its nature, the pro forma financial effects
may not necessarily give a fair reflection of ADvTECH`s financial position
subsequent to the acquisition.
These pro forma financial effects are based on ADvTECH`s published year end
results as at 31 December 2007, adjusted for the acquisition of Trinityhouse.
Save as set out hereunder there is no material impact on either the earnings or
assets of the ADvTECH Group as a result of the above transaction.
Before the After the Percentage
Acquisition 1 acquisition 2 3 change
Earnings per 32.1 32.1 -
share
(cents)
Headline 32.0 32.0 -
earnings per
share
(cents)
Net asset 105.4 105.4 -
value per
share
(cents)
Net tangible
asset value 102.7 92.4 (10%)
per share
(cents)
Weighted
average -
number of 371 970 371 970
shares in
issue (`000)
Number of 393 665 393 665 -
shares in
issue (`000)
Notes:
1. Extracted from the audited financial results for the year ended 31 December
2007.
2. The earnings and headline earnings per share figures in the "After the
acquisition" column have been based on the following assumptions:
- the effective date of the acquisition was 1 January 2007; and
- interest, at an average before tax rate of 11% per annum, was
forfeited on the cash paid.
3. The net asset value and net tangible asset value per share figures in the
"After the acquisition" column have been based on the assumption that the
purchase price was paid on 31 December 2007.
Whilst the acquisition has no immediate significant financial effects on the
operations of ADvTECH, the acquisition is expected to be earnings enhancing in
future years.
Categorisation
This is a category two transaction per the categorisation rules contained in the
JSE Listings Requirements.
Johannesburg
22 May 2008
Sponsor: Bridge Capital Advisors (Pty) Limited
Date: 22/05/2008 10:01:12 Produced by the JSE SENS Department.
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