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SVB
SVB
SVB - SilverBridge Holdings Limited - Acquisition of the Business of Ones `N
Zeros Professional Services (SA) (PTY) Ltd and withdrawal of cautionary
announcement
SilverBridge Holdings Limited
(formerly Synergy Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 1995/006315/06)
Share code: SVB ISIN: ZAE000086229
("SilverBridge" or "the company")
ACQUISITION OF THE BUSINESS OF ONES `N ZEROS PROFESSIONAL SERVICES (SA) (PTY)
LTD AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Introduction and terms
The board of SilverBridge is pleased to announce that the company has reached
agreement with Sandra Duetsch and Amanda Newell ("the vendors") for the
acquisition of 51% of the shares in Ones `N Zeros Professional Services (SA)
(Pty) Ltd ("Ones `n Zeros" or "the business") for a purchase consideration of
R11.1 million ("the consideration") ("the acquisition"). SilverBridge will have
an option to purchase the remaining 49% stake in the business.
The effective date of the acquisition is the first day of the calendar month
following the date on which all the conditions precedent (set out in paragraph 5
below) are fulfilled ("effective date").
Settlement of the consideration
Payment of the full purchase consideration of R11.1 million will be in a form of
50% in cash and 50% by the issue of 1 980 804 SilverBridge shares which will be
issued at an issue price of R2.80 per share ("consideration shares"). The
consideration will be settled as follows:
An initial cash payment of R 2.77million and by the issue of 990 402
SilverBridge shares equaling 50% of the consideration, payable on the effective
date and
The balance will be payable by the issue of 990 402 SilverBridge shares and a
cash payment of R2.77 million in two installments, subject to the achievement of
the Profit Warranties;
payable on the finalization of the audited financial statements of the business
in February 2009; and
payable on the finalization of the interim financial results of the business in
August 2009.
Description of the businesses and rationale for the acquisition
The vendor`s core business is the provision of system implementation consulting.
SilverBridge has been actively seeking an entrance into the consulting market in
the Life Assurance industry. Ones `N Zeros is seeking to broaden its exposure
into the financial services sector other than banking. There is considerable
opportunity for SilverBridge to introduce Ones `N Zeros into its client base and
use this as an opportunity to accelerate its plans in system implementation
consulting.
Ones `N Zeros will considerably improve the broader product offering of the
SilverBridge group and provide an opportunity for the intellectual capital
transfer between SilverBridge and Ones `N Zeros.
The vendor`s business is profitable, represents an earnings enhancement for
SilverBridge and is a step forward in the company`s stated intention of growing
by acquisition as well as organically.
Financial effects
The unaudited pro forma financial effects of the acquisition, based on the
published audited results of SilverBridge for the period ended 29 February 2008
are set out below. The unaudited pro forma financial effects have been prepared
for illustrative purposes only to provide information on how the acquisition may
have impacted on the results and financial position of SilverBridge. Preparation
of the unaudited pro forma financial effects is the responsibility of the
directors. Because of their nature, the pro forma financial effects may not
fairly present SilverBridge`s financial position after the acquisition or the
effect on future earnings:
After the
Before the acquisition
acquisition - pro forma %
change
Earnings (cents per share) 30.18 33.63 11.43%
Headline earnings (cents per 30.26 33.71 11.38%
share)
Net asset value (cents per share) 101.47 98.59 -2.84%
Net tangible asset value (cents 65.71 64.89 -1.26%
per share)
Average and weighted average 32 491 34 472 6.10%
number of shares in issue (In
thousands)
Number of shares in issue (In 32 597 34 578 6.08%
thousands)
Notes and assumptions:
The figures in the "Before" column are extracted from SilverBridge`s published
audited results for the year ended 29 February 2008.
Earnings and headline earnings figures in the "After" column are based on the
assumption that the acquisition took place on 1 March 2007, after taking into
account the following adjustments:
1 980 804 shares at R2.80 per share were issued as payment for the acquisition
on 1 March 2007;
Audited financial results of the business for the year ended 30 June 2007 pro
rata for 4 months and unaudited financial results of the business for the 8
months ended 29 February 2008 adjusted for additional costs;
assuming that the Profit Warrantees were achieved;
a company tax rate of 29%.
The net asset value and net tangible asset value figures in the "After" column
are based on the assumption that the acquisition took place on 29 February 2008
and that an assumed share price of R2.80 per share was used to calculate the
portion of the purchase consideration settled by the issue of 1 980 804
SilverBridge shares.
Conditions precedent
The acquisition is subject to conditions that are considered normal for a
transaction of this nature of which the following is outstanding:
Conclusion of service contracts between the business and the vendors.
Categorisation of the acquisition
The acquisition is categorised as a Category 2 transaction in terms of the JSE
Limited Listings Requirements for companies on the Alternative Exchange board.
The company will amend the articles of the vendor to conform to schedule 10 of
the JSE Limited Listing Requirements.
Withdrawal of cautionary announcement
Shareholders are referred to the cautionary announcement published on SENS on 28
May 2008. By virtue of the conclusion of the acquisition on the terms referred
to in this announcement, caution is no longer required to be exercised by
shareholders when dealing in their securities.
Johannesburg
18 June 2008
Sponsor: Sasfin Capital
(A division of Sasfin Bank Limited)
Date: 18/06/2008 07:05:01 Produced by the JSE SENS Department.
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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.
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