| Thu 2 Oct 2008, 8:00 | | ACE - Accentuate - Acquisition Of Interior Wooden Floors (Pty) Limited And |
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ACE
ACE
ACE - Accentuate - Acquisition Of Interior Wooden Floors (Pty) Limited And
Withdrawal Of Cautionary Announcement
Accentuate Limited
(previously known as Safic Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2004/029691/06)
(JSE code: ACE & ISIN: ZAE000115986)
("Accentuate" or "the company")
ACQUISITION OF INTERIOR WOODEN FLOORS (PTY) LIMITED AND WITHDRAWAL OF
CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are referred to the cautionary announcements dated 12 August 2008
and 19 September 2008.
Floorworx Africa (Pty) Limited, a wholly owned subsidiary of Accentuate has,
subject to the conditions precedent set out below, purchased the business and
certain specified assets and liabilities of Interior Wooden Floors (Pty)
Limited ("Interior Wooden Floors") ("the proposed acquisition").
2. RATIONALE
Accentuate is engaged in the manufacturing and distribution of infrastructural
supplies and maintenance solutions including flooring, chemical cleaning and
glass & aluminium related products and services. The company is engaged in the
provision of these products and services to the engineering, mining,
hospitality sectors and government departments. Clients span the spectrum of
government, parastatals, blue chip companies and medium size enterprises.
The rationale of the transaction is that it will expand the array of products
of the current flooring solutions as well as enable Accentuate to focus
marketing efforts towards medium sized, top end builds and refurbishments,
such as boutique hotels. This strategy will also benefit the glass & aluminium
business through the ability to provide another product to specialised
building projects.
3. DESCRIPTION OF INTERIOR WOODEN FLOOR`S BUSINESS
Interior Wooden Floors is an importer and / or distributor of quality
engineered wooden floors and accessories imported from Sweden and have
exclusive rights to its products from two main suppliers in Sweden, BonaKemi
AB and AB Gustaf Kahr.
Interior Wooden Floors has four showrooms situated in Bedfordview, Pretoria,
Fourways and Umhlanga and has over the last 15 years built a reputation of
being the market leader in the distribution of niche quality engineered wooden
floors.
4. TERMS AND CONDITIONS OF THE PROPOSED ACQUISITION
On 18 September 2008 Accentuate concluded an agreement for the purchase of
Interior Wooden Floors, subject to the fulfilment of the conditions precedent
in 6 below, with effect from 1 October 2008.
The purchase consideration for the business and certain specified assets and
liabilities of Interior Wooden Floors is R11.00 m payable as follows:
- R8.25 million less the difference between R7.50 million and the Net Asset
Value of Interior Wooden Floors (if the Net Asset Value on 1 October 2008
is less than R7.50 million) on 1 October 2008, payable in cash; and
- the issue of new ordinary Accentuate shares at the 3 day Value Weighted
Average Price ("VWAP") of Accentuate on 17 October 2008, subject to a
minimum of 90 cents per share, to the value of R2.75 million ("
consideration shares"). A top up payment in cash will be payable if the
value of the Accentuate consideration shares over the 3 business days on
17 October 2008 based on the VWAP over the said three days, is less than
R2.75 million
5. FUNDING OF THE PROPOSED ACQUISITION
The cash portion of the purchase price will be funded through the existing
cash resources of the company.
6. CONDITIONS PRECEDENT TO THE PROPOSED ACQUISITION
The proposed acquisition is subject to the fulfilment of the following
conditions precedent:
- Approval by Accentuates board of directors;
- Accentuate obtaining all the necessary regulatory approvals, including
Competition Commission approval;
- Accentuate completes a due diligence to its satisfaction on Interior
Wooden Floors;
- Accentuate enters into exclusive written distribution agreements with
BonaKemi AB and AB Gustaf Kahr; and
- existing leases in respect of the premises are assigned to Accentuate .
7. PRO FORMA FINANCIAL EFFECTS
The unaudited pro forma financial effects are provided for illustrative
purposes only to provide information about how the acquisition of Interior
Wooden Floors may have impacted on Accentuate`s results and financial
position. Due to the nature of the unaudited pro forma financial information,
it may not give a fair presentation of the group`s results and financial
position after the acquisition of Interior Wooden Floors.
The unaudited pro forma financial effects are based on the audited financial
information for the year ended 30 June 2008 as announced on SENS on 18
September 2008.
The unaudited pro forma financial effects have been included in terms of the
JSE Listings Requirements. The directors of Accentuate are responsible for
the preparation of the unaudited pro forma financial effects.
Audited Unaudited pro % Change
results for forma after
the year the
ended 30 June acquisition 30
2008 June 2008
Earnings per share (cents) (1) 19.25 21.77 13.10
Headline earnings per share 19.59 22.10 12.80
(cents) (1)
Net asset value per share 153 151.15 (1.43)
(cents) (4)
Net tangible asset value per 65 61.94 (4.56)
share (cents) (4)
Shares in issue at year end (5) 105 408 119 108 430 097
Weighted average 86 806 290 89 828 268
number of shares
in issue (5)
Notes:
1. The "before the acquisition" column has been extracted without adjustment
from the audited results for the year ended 30 June 2008.
2. The "after acquisition" earnings and headline earnings per share have
been based on the audited results of Interior Wooden Floors for the year
ended 31 March 2008. These audited results have been adjusted for:
- the profit margins earned between Interior Wooden Floors and a
supplier in Sweden;
- foreign exchange losses attributed to an inter-company loan that was
excluded as part of the sale agreement; and
- savings relating to insurance and directors fees.
3. The earnings and headline earnings per share were calculated as if the
acquisition took place on 1 July 2007.
4. The net asset value and net tangible asset value per share were
calculated as if the acquisition took place on 30 June 2008.
5. Assumed that 3 021 978 new ordinary Accentuate shares at 91 cents per
share will be issued to the vendors in settling part of the purchase
consideration. It is assumed that the share price of 91 cents per share
is based on the 30 VWAP ended 30 September 2008.
6. Goodwill of approximately R3.5 million will arise on the acquisition.
8. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Caution is no longer required to be exercised by shareholders when dealing in
their securities.
9. FURTHER ANNOUNCEMENT
Shareholders will be notified once the proposed acquisition has become
unconditional.
Johannesburg
1 October 2008
Designated adviser Exchange Sponsors
Attorneys for Accentuate Knowles Husain Lindsay Inc
Date: 02/10/2008 08:00:03 Produced by the JSE SENS Department.
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