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PSV
PSV
PSV - PSV Holdings - Acquisition Of Mather + Platt And Withdrawal Of
Cautionary Announcement
PSV HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1988/004365/06)
JSE code: PSV
ISIN: ZAE000078705
("PSV" or "the company")
ACQUISITION OF MATHER + PLATT AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Shareholders are advised that an agreement has been entered into between
Dasher (Pty) Limited, a wholly-owned subsidiary of PSV and Hudaco Trading
(Pty) Limited, which conducts the business of Mather + Platt ("the agreement")
in terms of which PSV will acquire the business of Mather + Platt as a going
concern on the terms and conditions set out below ("the transaction").
Warranties and indemnities as are normal in transactions of this nature have
been provided for in the agreement. There are no outstanding conditions
precedent.
2. BACKGROUND INFORMATION
PSV is an industrial engineering holding company which comprises three
operating business segments in South Africa and Africa:
pumps, spares and valves;
engineering linings and general industrial supplies; and
specialised services comprising petrochemical and cryogenics.
Mather + Platt has been synonymous with pumps in South Africa for over 70
years and has a reputation for providing a quality, reliable product with
superior performance. Mather + Platt is associated with suppliers who are
prominent world pump manufacturers and has distributors throughout South
Africa. It also has a presence in Angola, Malawi, Mozambique, Namibia, Zambia,
Zimbabwe and Swaziland.
Mather + Platt has three trading divisions which supply pumps, spares, repairs
and testing:
2.1 Mather + Platt Pumps
The division manufacturers a range of spares for existing pumps and also
undertakes repairs. The Mather + Platt range comprises horizontal split
casing, multistage end section and vertical pumps required for industrial,
municipal bulk water and power station applications. In addition, Mather +
Platt has gained Automatic Sprinkler Inspection Bureau approval for the
repairs, refurbishment and service of fire pumps.
2.2 Benmacor Pumps
This division supplies:
- The Viking internal gear pump and strainers from Viking, USA, which is
part of the Idex Corporation. The pump is utilised in niche markets, pumping
oils, bitumen, tars, gasses, molasses, paints and adhesives;
- EIM, submersible, drainage and slurry pumps from Japan for mining and
industrial applications; and
- TurboSan submersible sewage and waste water pumps from Turkey.
2.3 Hypower Pumps
Imports pump products for distribution.
Mather + Platt also represents Vanton Pumps & Equipment of the USA,
manufacturers of a range of engineered thermoplastic pumps for handling
corrosive, abrasive and hazardous fluids in the chemical industry.
3. RATIONALE FOR THE TRANSACTION
The transaction will enhance PSV`s product offering and strengthen the
company`s business with the acquisition of a new OEM (original equipment
manufacturer), namely Mather + Platt.
4. PURCHASE CONSIDERATION AND PAYMENT
The purchase consideration is R10 million in cash of which R9.5 million has
been paid. The remaining R0.5 million will be paid on the first anniversary of
the closing date.
5. EFFECTIVE DATE
The transaction was effective as of 1 February 2009.
6. FINANCIAL EFFECTS
The unaudited pro forma financial effects set out below are provided for
illustrative purposes only to assist the shareholders of PSV to assess the
impact of the transaction on the earnings per share ("EPS"), headline earnings
per share ("HEPS"), diluted earnings per share ("DEPS"), diluted headline
earnings per share ("DHEPS"), net asset value per share ("NAVPS") and net
tangible asset value per share ("NTAVPS") of PSV. These unaudited pro forma
financial effects have been disclosed in terms of the JSE Listings
Requirements and because of their nature may not give a fair presentation of
the PSV`s results and financial position after the transaction. The unaudited
pro forma financial effects are the responsibility of the directors of PSV and
are presented in a manner consistent with the accounting policies adopted by
PSV.
Before After Change
EPS (cents) 5.1 5.4 5.9%
HEPS (cents) 5.1 5.4 5.9%
DEPS (cents) 4.9 5.1 4.1%
DHEPS (cents) 4.9 5.1 4.1%
NAVPS(cents) 96.6 96.6 -
NTAVPS (cents) 39.8 38.5 -3.3%
Weighted average 236 131 236 131
number of shares in
issue (000)
Diluted weighted 247 798 247 798
average number of
shares in issue (000)
Shares in issue at 236 131 236 131
period end (000)
Notes:
1 The EPS, HEPS, DEPS, DHEPS, NAVPS and NTAVPS, as set out in the "Before"
column of the table, have been extracted from PSV`s unaudited results for the
six months ended 31 August 2008.
2 EPS and HEPS effects are based on the following assumptions and
information:
- the transaction was effective 1 March 2008;
- the purchase price of R10 million was paid in full on 1 March 2008 and
funded by PSV assuming additional borrowings of R10.0 million incurring
interest at 15.7% per annum (pre tax); and
- the total after tax profit attributable to Mather + Platt is R1.106 million
for the six months based on the management accounts of Mather + Platt for the
year ended 30 November 2008 pro-rated for six months.
3 NAVPS and TNAVPS effects are based on the following assumptions and
information:
- the transaction was effective 31 August 2008;
- the purchase price of R10 million was paid on 31 August 2008 in the manner
described in note 2 above;
- transaction costs were insignificant and were ignored; and
- the revaluations and allocations that may arise from the application of IFRS
3 (Business Combinations) have not been made as this will only be finalised in
due course. The pro forma financial information has thus been prepared on the
basis that the excess of the purchase price over the net asset value of Mather
+ Platt of R6.7 million will comprise goodwill of R3.3 million, which goodwill
is not amortised.
7. CLASSIFICATION OF THE TRANSACTION
The transaction is classified as a Category 2 transaction in terms of the
Listings Requirements of the JSE Limited.
8. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
The cautionary announcement is hereby withdrawn.
Johannesburg
16 February 2009
Corporate and Designated Adviser
Vunani Corporate Finance
Date: 16/02/2009 16:50:01 Produced by the JSE SENS Department.
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