| Thu 24 Jul 2008, 12:38 | | MIX - TeliMatrix - Acquisition of SDI Group of companies |
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MIX
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MIX - TeliMatrix - Acquisition of SDI Group of companies
TeliMatrix Limited
(Incorporated in the Republic of South Africa)
Registration number 1995/013858/06)
JSE Code: MIX
ISIN: ZAE000104683
("TeliMatrix" or "the Group")
ACQUISITION OF SDI GROUP OF COMPANIES
INTRODUCTION
Shareholders are advised that Telimatrix has reached agreement, subject to
conditions referred to below, to acquire substantially all the equity ("the
acquisition") in the Safe Drive International group of companies.
ACQUISITION OF SDI GROUP OF COMPANIES
TeliMatrix has agreed to purchase from Simon Williams, Craig Blinco, Jolinda
Williams and Karen Blinco (collectively, "the sellers"):
- l of the issued share capital in and the sellers` claims against Safe Drive
International (Pty) Ltd ("SDI"), a company incorporated in Australia and
SDI`s 100% owned subsidiary, Safe Drive FZE ("SDI (FZE)"), a company
incorporated in the Dubai Airport Free Zone of the Government of Dubai; and
- % of the issued share capital in and 49% of the shareholder claims against
Driver Training International Middle East and Africa ("DTI"), a company
incorporated in the United Arab Emirates.
THE BUSINESS OF THE SDI GROUP OF COMPANIES
SDI is a recognised leader in the delivery of effective land transport safety
solutions. The business delivers a unique, holistic approach to commercial
vehicle safety into which the Group`s products and services play an integral
role. SDI has been a distributor of Omnibridge (a Group company) for the past
eight years and has successfully embraced the Group`s annuity based business
strategy. Over the past year alone, SDI has added annuity contracts comprising
more than 3,000 commercial vehicles. SDI has a primary focus on the oil and gas
and mining sectors in the Middle East and Asian markets and also has a presence
in Australia and Russia.
RATIONALE FOR THE ACQUISITION
In line with the Group`s stated vision to be a leading global provider of
information and related services for mobile assets, the Group sees SDI`s expert
management team and their unique, holistic approach to transport safety as
adding extensive value to the Group`s intellectual capital pool. This
acquisition will bring a further value proposition to the Group`s existing
customer base and further expands its global footprint.
SALIENT TERMS AND CONDITIONS OF THE ACQUISITION
The acquisition is with effect from 1 July 2008 and the aggregate purchase
consideration comprises cash of six million Australian dollars ("AUD") and 17
million ordinary shares in -Telimatrix (based on an agreed value of R1,70 per
share). The consideration shares carry trading restrictions, ensuring the
continuity of an ownership culture with the key SDI management.
The acquisition is conditional on receipt of the approval of the South African
Reserve Bank.
FINANCIAL EFFECTS
The unaudited pro forma financial effects for which the board of Telimatrix is
responsible are presented for illustrative purposes only and may not fairly
present the Group`s financial position, changes in equity, results of operations
or cash flows following the implementation of the transactions.
The table below sets out the unaudited pro forma financial effects of the
transactions based on:
- the reviewed pro-forma financial results of the Group for the year ended 31
March 2008 as published, and
- the unpublished management accounts of the SDI Group for the period 1 July
2007 to 30 June 2008.
Before After %
Change
Earnings per share (cents) 9.7 9.9 2.1%
Headline earnings per share (cents) 9.7 9.9 2.1%
Adjusted headline earnings per share 12.7 13.0 2.4%
(cents)
Net asset value per share (cents) 93.4 94.4 1.1%
Net tangible asset value per share (15.3) (19.8) 29.4%
(cents)
Number of shares in issue (`000) 640 000 657 000
Weighted average number of shares in 640 000 657 000
issue (`000)
Notes:
- The "Before" column reflects the earnings per share ("EPS"), headline
earnings per share("HEPS"), net asset value ("NAV") per share and net
tangible asset value ("NTAV") per share as published in the pro forma
results of the Group for the year ended 31 March 2008.
- EPS and HEPS in the "After" column are based on the following:
- The assumption that the acquisition was effected on 1 April 2007;
- Incorporating the warranted unaudited pro-forma after tax earnings of
the SDI group of companies for the 12 month period 1 July 2007 to 30
June 2008 (`the period`)of A$ 1,500,000
- An average exchange rate of ZAR6.60 against AUD1.00 for the period;
- Interest was calculated on the cash consideration at an effective
weighted average rate of 13.0%, being the prime rate less 1.2% for the
period;
- Interest payable on the cash consideration is not deductible for tax
purposes;
- Intangible assets with an estimated value of ZAR 9 million have been
amortized over their estimated useful lives of 5 years. No formal
IFRS3 purchase price allocation has been performed as yet;
- That all shares to be issued were already in issue on 1 April 2007
- The effect on net asset value and tangible net asset value per share is
based on:
- The net asset value of the SDI group being AUD 2,2 million at 1 July
2008;
- Intangible assets attributable to the acquisition of ZAR50,6 million
- An exchange rate of ZAR7.65 to AUD1.00 at 1 July 2008
- The shares being issued at a price of 130 cents per share.
Johannesburg
24 July 2008
Corporate advisor, legal advisor and sponsor
Java Capital (Proprietary) Limited
Date: 24/07/2008 12:38:07 Produced by the JSE SENS Department.
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