| Tue 27 May 2008, 13:42 | | BEG - Beige Holdings - Purchase Of Rap Products International (Pty) Ltd ("RAP") |
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BEG
BEG
BEG - Beige Holdings - Purchase Of Rap Products International (Pty) Ltd ("RAP")
BEIGE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/006871/06)
("Beige" or "the company")
ISIN Code: ZAE000034161 Share code: BEG
PURCHASE OF RAP PRODUCTS INTERNATIONAL (PTY) LTD ("RAP")
Terms of the acquisition of RAP
Shareholders are advised that Beige has concluded agreements signed on 22 May
2008 and 23 May 2008 in terms of which Beige will acquire 100% of the shares in
RAP from Corvest (Proprietary) Limited, Rino Protti, Keith Smith, Bruce Frewen,
Mark Dunn and Andrea Protti, ("the Vendors"), for a purchase consideration of
R14 700 000 plus the Vendors` Claims at face value to a limit of R3 688 890.00
("the Corvest Sale of Shares and Claims Agreement"). In addition, Beige has
agreed to purchase Management Claims totalling R1 159 028, payment of which is
subject, in part, to warranted earnings performance as further detailed below.
Management comprises Andrea Protti, Bruce Frewen and Mark Dunn.
The effective date of the purchase is the closing date, being the 3rd business
day following the date on which the conditions precedent are fulfilled or
waived, details of which are listed below.
- the approval of the purchase by the Competition Commission in terms of the
Competition Act 1998 (Act No. 89 of 1998);
- regulatory approvals from the JSE, where applicable;
The Management Claims totalling R1 159 028 will be paid following achieving an
EBITDA warranty, adjusted for rental savings, of R8 024 000 for the 12 (twelve)
month period ending 31 March 2009. The above Management Claims will be paid by
the Purchaser on 31 May 2009, subject to the performance of the Company as
measured against the above EBITDA warranty. Should the actual EBITDA achieved
for the 12 (twelve) month period ending 31 March 2009 be less than that
calculated as mentioned above, then the payment due will be reduced
proportionately. Other than the EBITDA warranty, the purchase of RAP is subject
to the normal terms and warranties usual for a transaction of the nature
contemplated.
It is agreed that within 7 (seven) days of the Vendors receiving payment in
terms of the Corvest Sale of Shares and Claims Agreement, Bruce Frewen and
Andrea Protti (but not Mark Dunn) will subscribe for new publicly listed shares
of the Purchaser at the then ruling price thereof to the order of 75% (seventy
five percent) of the amount they each received in terms of the Corvest Sale of
Shares and Claims Agreement.
Background to RAP
RAP was formed in 1988 as a specialised pump company supplying SAR pumps. RAP
was founded by Rino and Andrea Protti, having realised the potential for a
medium sized niche player in the packaging industry. RAP subsequently
progressed to a full spectrum of primary packaging supplying the Perfumery,
Cosmetics, Toiletry, Pharmaceutical, Household, Beverage and Cleaning Industry
and offers a one stop shopping opportunity for all packaging required in the
above industries, drawing its capabilities from both importing and locally
producing products which complement each other. RAP is a packaging company that
services several markets, but is mainly focused on the Cosmetic Industry, and
produces products for several sectors using numerous packaging technologies.
Rationale
The purchase of RAP is in line with the Group`s strategy to acquire companies
through which to achieve its vision of positioning Beige as a significant player
in its industry. The purchase of RAP should result in economies of scale due to
synergies with Beige`s wholly owned subsidiary Crystal Pack (Proprietary)
Limited, which in turn should enhance Beige`s earnings and provide good
opportunities for organic growth.
Pro forma financial effects
Set out in the table below are the pro forma financial effects of the purchase
of RAP, which have been prepared for illustrative purposes only, to provide
information about how the purchase of RAP might have affected the financial
information, presented. The pro forma financial effects, because of its nature,
may not give a true reflection of the financial position, the cash flow
position, and the results of operations or the changes in equity of Beige. The
pro forma financial effects have been prepared in compliance with SAICA
guidelines and IFRS and are as follows:
Fully diluted information Before After % change
Attributable earnings/(loss) per (10.05) (9.85) 2.07%
ordinary share (cents)
Headline earnings per share (cents) 1.07 1.19 11.08%
Net asset value per share (cents) 9.42 9.48 0.67%
Net tangible asset value per share 3.60 3.60 0.15%
(cents)
Weighted average shares in issue 1 051 034 1 059 594 0.81%
(000`s)
Ordinary shares in issue at period end 1 842 582 1 851 142 0.46%
(000`s)
Notes:
(i) The figures as set out in the "Before" column of the table, are based on
the published unaudited financial results of Beige for the 6 months ended 30
September 2007.
(ii) The figures, as set out in the "After" column of the table, are based upon
the published unaudited financial results of Beige for the 6 months ended 30
September 2007, adjusted for the assumptions that:
- the purchase of RAP was effective from 01 March 2007 and the results from
RAP were included from such date;
- due to RAP having a different year end, the 6 month results used for RAP
were the unaudited financial results for the 6 months ending 31 December 2007 as
they are the company`s latest results and they represent the 6 month period on
which the pro-forma have been based;
- it was assumed that the purchase price of R14 700 000 and Vendors` Claims
of R3 688 890 were settled in full in cash by Beige as at 01 March 2007;
the amount due for the Management Claims of R 1 159 028 was recorded as a long
term liability;
- subsequent to the above it is assumed that RAP will make their profit
warranties as set out in the agreement, in which case the outstanding Management
Claims will be paid.
- as per the Sale of shares agreement, Bruce Frewen and Andrea Protti (part
of ongoing management) will subscribe for new publicly listed shares of the
Beige at the then ruling price thereof to the order of 75% (seventy five
percent) of the amount they each received for the sale of their shareholdings
in RAP;
- the total amount of new shares issued in Beige for management, as mentioned
above, calculated at a Beige share price of 23 cents amounted to 8 559 783
shares, which has been assumed to be paid for in cash;
- the shares issued are assumed to have a par value of 1 cent and the
remaining funds received form part of share premium.
(iii) Goodwill of approximately R337 000 will arise on the transaction. An
allocation between goodwill and other intangibles has not been made as at date
of acquisition. No amortisation of intangibles or impairment of goodwill has
been assumed.
Johannesburg
27 May 2008
Sponsors
Arcay Moela Sponsors
(Proprietary) Limited
(Registration number 2006/033725/07)
Date: 27/05/2008 13:42:02 Produced by the JSE SENS Department.
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