| Thu 11 Jun 2009, 11:07 | | ADI - Adaptit Holdings - Revised Pro Forma Financial Effects Relating to the |
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ADI
ADI
ADI - Adaptit Holdings - Revised Pro Forma Financial Effects Relating to the
Acquisition by Adaptit of 51% of its Holdings (Proprietary) Limited and
Posting of Circular to Shareholders
ADAPTIT HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1998/017276/06)
Share code: ADI & ISIN: ZAE000113163
("AdaptIT" or "the company")
REVISED PRO FORMA FINANCIAL EFFECTS RELATING TO THE ACQUISITION BY ADAPTIT OF
51% OF ITS HOLDINGS (PROPRIETARY) LIMITED AND POSTING OF CIRCULAR TO
SHAREHOLDERS
1. INTRODUCTION
Shareholders of AdaptIT are referred to the announcement dated 1 June
2009 in which shareholders were advised that AdaptIT had entered into an
agreement to acquire 51% of the issued share capital in, and 51% of the
loan accounts, including claims, against ITS Holdings (Proprietary)
Limited ("ITS") from The Rooibos Trust ("Rooibos") and from EDITS
Holdings (Proprietary) Limited ("EDITS") ("the vendors") as linked
transactions, for a total consideration of R16 million ("the
acquisition").
The circular incorporating the detailed terms of the acquisition and
notice convening a general meeting of AdaptIT shareholders to be held at
09:30 on Friday, 26 June 2009 at the registered office of AdaptIT,
Gleneagles Park, 10 Flanders Drive, Mount Edgecombe, 4300, Durban, was
posted to shareholders today, Thursday, 11 June 2009.
Shareholders are further advised that the pro forma financial effects
published in the announcement dated 1 June 2009 have been revised and the
updated pro forma financial effects are presented in paragraph 4 below.
2. FUNDING
2.1.1 AdaptIT, through its subsidiary InfoWave (Proprietary) Limited
("Infowave"), will enter into a loan agreement with Investec Private
Bank, a division of Investec Bank Limited, in terms of which it will
obtain a loan facility of R8 million ("Investec loan").
The term of the Investec loan will be a maximum of 48 months from
drawdown at an interest rate of 1% above Investec`s prime lending
rate from time to time, which is currently at 11.00%.
2.1.2 AdaptIT has secured a further loan facility of R5 million from ITS
Tertiary Software (Proprietary) Limited, a wholly-owned subsidiary
of ITS, in favour of InfoWave.
The term of the loan will be a maximum of 60 months from drawdown at
an interest rate of Standard Bank of South Africa Limited`s prime
lending rate from time to time, which is currently 11.00%.
3. AGENT`S FEES
ITS will be liable for the transaction arrangement fee of approximately
R960 000 payable to Ararat Corporate Advisory Services (Proprietary)
Limited in respect of the acquisition, which shall be accrued for and
expensed in the accounts of ITS prior to the effective date, being 30
June 2009.
4. PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION
The table below sets out the unaudited pro forma financial effects of the
proposed acquisition on AdaptIT`s earnings per share, headline earnings
per share, net asset value per share and tangible net asset value per
share.
The unaudited pro forma financial effects have been prepared to
illustrate the impact of the proposed acquisition on the reported
financial information of AdaptIT for the year ended 28 February 2009, had
the proposed acquisition occurred on 1 March 2008 for income statement
purposes and on 28 February 2009 for balance sheet purposes.
The unaudited pro forma financial effects have been prepared using
accounting policies that comply with International Financial Reporting
Standards and that are consistent with those applied in the audited
results of AdaptIT for the year ended 28 February 2009.
The unaudited pro forma financial effects which are the responsibility of
the directors are provided for illustrative purposes only and, because of
their pro forma nature may not fairly present AdaptIT`s financial
position, changes in equity, results of operations or cash flow.
Pro forma Pro forma % change
before the after the
acquisition acquisition
Earnings per share (cents) 9.44 9.48 0.42
Headline earnings per share 9.46 9.50 0.42
(cents)
Net asset value per share 34.25 31.57 (7.82)
(cents)
Tangible net asset value per 22.17 17.18 (22.51)
share (cents)
Weighted average number of 96 203 96 203 -
shares in issue (000`s)
Total number of shares in 95 650 95 650 -
issue (000`s)
Notes:
1. The amounts in the "Pro forma before the acquisition" column have been
extracted from the audited results of AdaptIT for the year ended 28
February 2009.
2. The amounts in the "Pro forma after the acquisition" column reflect the
financial effects of the acquisition on AdaptIT and includes estimated
transaction costs of R1 177 000. It also includes after tax cost of the
Investec loan raised and the after tax loss on the interest forgone on
the R5 million loan from ITS Tertiary Software (Proprietary) Limited to
the AdaptIT group and the R3 million utilised in the transaction. The
interest of R960 000 on the Investec loan has been calculated at 12.00%,
being the latest prime lending interest rate plus 1.00%. The interest
forgone of R600 000 has been calculated using an interest rate of 7.5%,
being the current repo rate. Agent fees of R960 000, in terms of
paragraph 3 above have also been included. It also excludes the
shareholders` loan of R16 346 538 between AdaptIT and ITS and includes
goodwill on the acquisition of R1 100 000.
3. The financial effects of the acquisition have been extracted from the
unaudited results of ITS for the 12 month period ended 31 December 2008.
In order to achieve this twelve month period, the six month interim
results to 31 December 2007 were subtracted from the 12 month year-end
results for 30 June 2008. This gives the six month results from 1 January
2008 to 30 June 2008. To this amount, the six month interim results to 31
December 2008 were added in order to determine the 12 months results from
1 January 2008 to 31 December 2008.
4. The effects on earnings per share and headline earnings per share are
calculated based on the assumption that the acquisition was effected on 1
March 2008.
5. The effects on net asset value per share and tangible net asset value per
share are calculated based on the assumption that the acquisition was
effected on 28 February 2009.
6. All financial effects have an ongoing effect, with the exception of the
transaction costs as set out in note 2 above.
Durban
11 June 2009
Sponsor and Corporate Adviser
Merchantec (Proprietary) Limited
Reporting accountants
Ernst & Young Inc.
Date: 11/06/2009 11:07:01 Produced by the JSE SENS Department.
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