| Thu 6 Nov 2008, 7:30 | | SNV - Santova Logistics Limited - The Acquisition Of Mcgregor Customs (Pty) Ltd |
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SNV
SNV
SNV - Santova Logistics Limited - The Acquisition Of Mcgregor Customs (Pty) Ltd
And Withdrawal Of Cautionary Announcement
SANTOVA LOGISTICS LIMITED
(Registration Number: 1998/018118/06)
("Santova" or "the Company")
Share Code: SNV ISIN: ZAE000090650
THE ACQUISITION OF MCGREGOR CUSTOMS (PTY) LTD AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
INTRODUCTION
Further to the cautionary announcement published on SENS on 31 October 2008,
River Group is authorised to announce that, subject to the conditions precedent
set out below Santova has purchased 100% of McGregor Customs (Pty) Ltd
("McGregor") from Coolaroo Holdings (Pty) Ltd ("Coolaroo") for approximately
R12,5 million with effect 01 July 2008.
THE ACQUISITION OF MCGREGOR CUSTOMS (PTY) LTD ("Transaction")
McGregor is an Australian (Sydney) owned company, specialising in customs
brokerage, trade facilitation and international freight forwarding. They are
licensed by the Australian Customs Service, holding licence number 719. They are
accredited by the Australian Quarantine and Inspection Service, accreditation
number 1119. The company is a foundation member of the Customs Brokers and
Forwarders Council of Australia of which Glenn McGregor is a Fellow member.
Glenn McGregor founded the company in 1988 and has established a quality diverse
client base of approximately 160 clients most of whom have been with the company
for approximately 15 years.
On fulfillment of the conditions precedent, Santova will settle the purchase
price as follows:
- cash AUS $ 1 080 000 (R7 560 000); and
- the issue of 61 200 014 Santova ordinary shares at an issue price of 8
cents per share.
Santova acquiring 100% of the issued share capital in and the sale claims that
the shareholder will have against McGregor Customs (Pty) Ltd.
Coolaroo warrants that the accumulative profit after tax for the years ending 30
June 2009 and 30 June 2010 will not be less than AUS $ 800 000. Should the
profit warranty not be achieved, the purchase price will be reduced by Coolaroo
returning (by the return of capital without consideration) to Santova the number
of shares allotted and issued (at 8 cents) to the extent that the above warranty
is not achieved.
RATIONALE
The underlying rationale for the acquisition includes the following:
Santova`s clients who import from China/Hong Kong to South Africa also ship the
same goods from China/Hong Kong to Australia. This constitutes a captive client
base whose business will boost the target company`s earnings with immediate
effect, particularly with Santova having its own offices in Hong Kong and China.
Santova`s own offices in China/Hong Kong have shipments moving to Australia,
which can now be allocated to the target company - enhancing earnings.
Patent International, Santova`s partner in China, has confirmed that they will
as an organization use the target company as their agent/representative in
Australia, which will result in significant volumes/revenue for the target
company.
In consideration of the above, such an acquisition represents a huge opportunity
for Santova to `unlock` significant value for the Group in Australia.
CONDITIONS PRECEDENT
The transaction is subject, inter alia, to the fulfilment of the following
conditions precedent:
- the completion of a due diligence to the satisfaction of the board of
Santova on or before 15 December 2008;
- obtaining approval of the SARB, JSE, SRP and all other regulatory
authorities and consents where applicable; and
- finalising employment or service contracts with key employees.
FINANCIAL EFFECTS
The financial effects of this transaction will be published after finalisation
of the due diligence and fulfillment of all the conditions precedent.
WITHDRAWAL OF CAUTIONARY
Shareholders are referred to the cautionary announcement dated 31 October 2008,
and are advised that caution is no longer required to be exercised by
shareholders when dealing in their securities.
05 November 2008
Durban
Designated Advisor
River Group
Date: 06/11/2008 07:30:01 Produced by the JSE SENS Department.
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