| Tue 15 Dec 2009, 10:13 | | DTH - DTH Dynamic Technology Holdings Limited - Disposal of Radical Business |
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DTH
DTH
DTH - DTH Dynamic Technology Holdings Limited - Disposal of Radical Business
DTH DYNAMIC TECHNOLOGY HOLDINGS LIMITED
(Registration Number: 2004/016984/06)
Share Code: DTH
ISIN: ZAE000124681
("DTH" or "the Company" or "the Group")
www.dth.co.za
DISPOSAL OF RADICAL BUSINESS
THE TRANSACTION
DTH shareholders are hereby advised that an agreement ("the Agreement") has been
reached between Lifeworld Group (Pty) Ltd ("the Purchaser"), a wholly owned
subsidiary of UCS Limited ("UCS") and Dynamic Visual Technologies (Pty) Ltd
("DVT" or "the Seller"), a wholly owned subsidiary of the Company, whereby the
Purchaser will acquire as a going concern the business operated by DVT known as
the Radical Business Unit ("the Business") for a offer consideration of R1,94
million ("the Transaction").
The effective date of the Transaction is 1 December 2009, notwithstanding the
signature date and fulfilment or waiver of the last of the suspensive conditions
as contained in the Agreement.
CONSIDERATION
The offer consideration, consisting of a cash consideration of R1,94 million
pertaining to the Transaction will be settled as follows:
Discharging the assumed liabilities: R0,09 million
Offset against working capital: R0,35 million
Offer consideration received in cash: R1,50 million
background to THE RADICAL BUSINESS
The Business owns, develops, markets, sells, implements and supports specialist
software products for the Service Management (Radical), and Customer Loyalty
Markets (Loyalty4Life).
DTH originally acquired the Business from Solutional cc on 1 December 2007.
DTH and UCS have collaborated since 2007 on the development of the Loyalty4Life
software products and the sales and marketing thereof.
rationale for the TRANSACTION
The Business is a niche solution provider which at the time of acquisition
complimented DTH`s objective of being a leading provider of custom software and
related services, however, the Business remained too small and specialised to be
considered core to the business of DTH going forward.
This acquisition, compliments UCS`s existing software and solutions offering, by
providing an integrated multi-channeled platform, upon which companies can
enable value added services, member, CRM and loyalty programme management,
stored value solutions (such as gift and payout cards), campaign management and
treasury administration services.
TERMS AND CONDITIONS
The Transaction is conditional upon the following suspensive conditions:
* that material contracts are ceded and assigned to the Purchaser;
* that the Seller procure that Offline Digital (formerly a subsidiary of the
Group) grants a perpetual non-transferable source code licence to the
Offline Digital Content Management Framework
* that the board of directors the Purchaser approves the execution of the
agreement;
* that the board of directors the Seller approves the execution of the
agreement;
There are no performance warrantees, but the Sellers have provided the Purchaser
with various other warranties normal to a sale of this nature.
Application of Proceeds
The proceeds to be received by DTH on the disposal the Business Digital will be
added to the Group`s reserves.
Unaudited Pro FORMA financial effects
The unaudited pro forma financial effects on DTH before and after the
Transaction, as set out in the table below, are the responsibility of the
Company`s directors, and have been prepared for illustrative purposes only to
show how the Transaction may have affected DTH`s results for the 6 month period
ended 31 August 2009.
The unaudited pro forma financial effects, which, due to their nature, may not
fairly reflect DTH`s financial performance and position after the Transaction,
are based on the assumptions that:
* for the purpose of calculating earnings per ordinary share (basic and
diluted) and headline earnings per ordinary share (basic and diluted), the
Transaction was effected on 1 March 2009; and
* for the purpose of calculating net asset value and net tangible asset value
per ordinary share, the Transaction was effected on 31 August 2009.
Published Pro Forma Change Change
Before After (cents) (%)
(cents)1 (cents)
Basic and diluted earnings per share 6,8 8,5 1,7 25,0
Headline and diluted headline 6,8 6,3 -0,5 -7,4
earnings per share
Net asset value per share 68,7 70,8 2,1 3,1
Net tangible asset value per share 46,1 49,1 3,0 6,5
Weighted number of shares in issue 47,952,968 47,952,968
Actual number of shares in issue 50,000,000 50,000,000
Notes
1. The "Before" financial information has been extracted, without adjustment,
from DTH`s published unaudited interim results for the 6 month period ended
31 August 2009.
2. The "After" financial information reflects the exclusion of net profit
before tax of R297,901 for the 6 month period ended 31 August 2009, the
inclusion of R1,231,670 profit on sale of business, interest received on
the cash consideration of R1,5m calculated at 6,5% per annum, and the
taxation effects of these adjustments. The taxation rates applicable are
28% companies tax and an effective 14% for capital gains tax.
3. The basic and diluted earnings per share and basic and diluted headline
earnings per share figures are calculated based on weighted average number
of shares in issue of 47 952 968 shares at 31 August 2009.
4. The net asset value per share and net tangible asset value per share have
been calculated based on 50 000 000 shares in issue at 31 August 2009.
CATEGORISATION
In terms of the Listings Requirements of the JSE Limited, the Transaction is
deemed to be a Category 2 transaction and therefore does not require shareholder
approval.
WITHDRAWAL OF CAUTIONARY
Shareholders are referred to the cautionary announcement dated 14 December 2009,
and are advised that negotiations have been successfully concluded. Shareholders
are accordingly advised that caution is no longer required to be exercised by
shareholders when dealing in their securities.
Johannesburg
15 December 2009
Directors:
H Ratshefola (Chairman)*, C Wilkins (Group CEO), G Fowler (CFO), D M Hughes, J
Mamogale#, R Fehrsen#
* Non-executive directors, # independent non-executive directors
Auditors: Andre Gerber Greenwoods Chartered Accountants
Designated Advisor: PSG Capital (Proprietary) Limited
Date: 15/12/2009 10:13:02 Produced by the JSE SENS Department.
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