| Mon 26 May 2008, 17:05 | | SDH - Securedata Holdings - Acquisition By Securedata Of Mis Corporate Defence |
|
SDH
SDH
SDH - Securedata Holdings - Acquisition By Securedata Of Mis Corporate Defence
Solutions Limited ("MIS CDS")
SECUREDATA HOLDINGS LIMITED
(Formerly ERP.com Holdings Limited)
Incorporated in the Republic of South Africa
(Registration number 1998/010017/06)
Share code: SDH ISIN: ZAE000096368
("SecureData" or "the company")
ACQUISITION BY SECUREDATA OF MIS CORPORATE DEFENCE SOLUTIONS LIMITED ("MIS CDS")
INTRODUCTION
Further to the announcement released on SENS on 18 January 2008, shareholders
are advised that through a recently established special purpose vehicle
subsidiary, SDH UK Limited ("SDH UK"), SecureData together with certain of MIS
CDS` management, (collectively, Etienne Greeff and Catharina Greeff, Matt
Tomlinson and Johan du Toit ("MIS CDS Management")) and MIS Nominees Limited
(who hold shares for certain employees of MIS CDS) ("MIS Nominees"), is
proposing to acquire 100% of the issued share capital of MIS CDS, a company
incorporated in the United Kingdom ("UK"), at a Sale Price of GBP14 200 000
("Sale Price") ("the acquisition").
SecureData, together with MIS CDS Management and MIS Nominees, will subscribe
for 75.77%, 23% and 1.23%, respectively, in the issued share capital of SDH UK.
THE ACQUISITION
2.1 Nature of MIS CDS business
Headquartered in Maidstone, Kent, MIS CDS offers a full range of market leading
security and mobile connectivity products and services to the UK Market. It acts
as a reseller of market leading security products and as an outsourced provider
of security monitoring and threat mediation services.
MIS CDS is the UK`s longest established security specific services organisation
and delivers security solutions to a range of blue chip customers in the UK. MIS
CDS partners with a number of technology vendors that are common to those
utilised by SecureData.
2.2 The offer and purchase consideration
The maximum price payable by SDH UK to the Vendors (being the parties who
collectively hold 1 358 057 shares in MIS CDS, constituting 100% of the issued
share capital of MIS CDS) and in terms of the offer in respect of the entire
issued share capital of MIS CDS, is GBP14 200 000 ("offer").
The offer document was sent to the Vendors on 20 February 2008. To date,
irrevocable undertakings, in writing, to accept the offer have been obtained in
respect of 1 229 218 shares, representing 90.51% of the issued share capital of
MIS CDS.
2.3 Funding of SDH UK and payment of Sale Price
In order to fund the Sale Price, it is intended that SecureData, MIS CDS
Management and MIS Nominees will:
- subscribe for 75.77%, 23% and 1.23%, respectively, in SDH UK at a
subscription price of GBP151 544, GBP46 001 and GBP2 455, respectively, for a
total consideration of GBP200 000 ("Share Capital"); and
- advance GBP12 482 000 in cash, GBP1 430 833 and GBP87 166 in cash,
respectively for a total amount of GBP14 000 000 ("Loan") to SDH UK where, MIS
CDS Management shall not pay cash, but Loan Stock to be issued to them by SDH UK
shall be treated as part settlement of the consideration payable to them in
respect of the disposal of their shares in MIS CDS.
SDH UK will use the Share Capital together with the Loan to pay the Sale Price
as and when it becomes payable and shall issue Loan Stock to SecureData, MIS CDS
Management and MIS Nominees.
The Sale Price is payable as follows:
- GBP13 000 000 upon implementation of the acquisition (of which GBP5 000 000
will be held in Escrow to settle any warranty claims which are determined
pending completion of the audit for the year ending 30 June 2008);
- GBP400 000 in pursuance of MIS CDS having achieved a profit after tax of
GBP600 000 for the six months ended 31 December 2007;
- GBP800 000 deferred consideration subject to achievement of profit before
tax of GBP1 500 000 for the year ending 30 June 2008 and a deferred
consideration payable to I-Sentral Security Limited (a subsidiary acquired in
February 2007) of approximately GBP300 000.
2.4 Conditions precedent and effective date
In terms of the offer, the acquisition is subject to:
- SecureData obtaining the required funding to finance its portion of the
subscription amount and its proportion of the Loan Stock Advances;
- approval by a majority of SecureData`s shareholders present and voting at
the general meeting;
- the offer becoming or being declared unconditional.
The effective date of the acquisition in terms of the offer is the date upon
which the last of the conditions is fulfilled or waived.
2.5 Funding of SecureData
SecureData will fund its portion of the subscription in SDH UK and the Loan
Advances in the aggregate sum of GBP12 633 545, through a combination of debt
funding, equity funding and available cash resources:
2.5.1 Debt funding
SecureData has entered into an agreement with FirstRand Bank Limited, acting
through Rand Merchant Bank, in terms of which it has obtained a R100 million
loan facility.
2.5.2 Equity funding
It is proposed that the equity funding of R105 million be raised by way of:
- a specific issue of shares for cash at 170 cents per share, full details of
which will be set out in the circular to SecureData shareholders referred to in
paragraph 4 below; and
- a renounceable claw back offer to SecureData shareholders at a subscription
price of 170 cents per share, which will be implemented subject to approval of
the acquisition by shareholders in general meeting.
2.5.3 Available cash resources
SecureData has available cash resources in the amount of R21 748 000 as at 31
January 2008.
3. PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTIONS
The table below sets out the unaudited pro forma financial effects of the
acquisition, the specific issue of shares for cash and the renounceable claw
back offer (hereinafter, collectively referred to as the "transactions"), on
SecureData`s earnings per share, headline earnings per share, net asset value
per share and tangible net asset value per share.
The unaudited pro forma financial effects have been prepared to illustrate the
impact of the proposed transactions on the reported financial information of
SecureData for the six months ended 31 January 2008, had the proposed
transactions occurred on 1 August 2007 for income statement purposes and on 31
January 2008 for balance sheet purposes.
The unaudited pro forma financial effects have been prepared using accounting
policies that comply with International Financial Reporting Standards and that
are consistent with those applied in the audited results of SecureData for the
twelve months ended 31 July 2007 as well as the six months ended 31 January
2008.
The unaudited pro forma financial effects, which are the responsibility of the
directors, are provided for illustrative purposes only and, because of their pro
forma nature may not fairly present SecureData`s financial position, changes in
equity, results of operations or cash flow.
Before the After the Percen-tage
proposed proposed change
transactions transactions
Basic earnings per share 8.71 7.90 (9.27)
(cents)
Headline earnings per share 8.71 8.30 (4.71)
(cents)
Net asset value per share 39.13 82.37 110.50
(cents)
Tangible net asset value per 7.73 (39.90) (616.17)
share (cents)
Weighted average number of 159 749 221 749 38.81
shares in issue (000`s)
Fully diluted weighted 168 867 230 867 36.72
average number of shares in
issue (000`s)
Notes:
1. The amounts in the "Before the proposed transactions" column have been
extracted from the reviewed interim results of SecureData for the six months
ended 31 January 2008.
2. The amounts in the "After the proposed transactions" column reflect the
financial effects of the transactions on SecureData.
3. The effects on basic earnings per share and headline earnings per share are
calculated based on the assumption that the transactions were effected on 1
August 2007.
4. The effects on net asset value per share and tangible net asset value per
share are calculated based on the assumption that the transactions were effected
on 31 January 2008.
4 FURTHER DOCUMENTATION
A circular containing full details of the proposed acquisition and the specific
issue of shares for cash, as well as the Revised Listing Particulars of
SecureData and a notice to convene a general meeting of SecureData shareholders
in order to consider and, if deemed fit to pass, with or without modification,
the resolutions necessary to approve and implement the acquisition and the
specific issue of shares for cash, will be sent to SecureData shareholders on or
about 27 May 2008.
26 May 2008
Sponsor
Merchant Sponsors (Proprietary) Limited
Attorney in respect of the circular
Fluxmans Inc.
Auditors and reporting accountants
KPMG Inc.
Date: 26/05/2008 17:05:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
