| Tue 15 Jun 2010, 16:26 | | AVU - Avusa Limited - Press release |
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AVU
AVU
AVU - Avusa Limited - Press release
Avusa Limited
(Incorporated in the Republic of South Africa)
(Registration number 2008/002461/06)
JSE share code: AVU
ISIN: ZAE000115895
("Avusa" or "the Company")
Press release
Value proposition relating to the proposed acquisition by Avusa of the entire
issued share capitals of Universal Print Group (Proprietary) Limited ("UPG") and
Hirt & Carter (Proprietary) Limited ("H&C") (collectively, "the UHC Business")
from UHC Communications (Proprietary) Limited ("UHC" or "the Seller") ("the
Transaction")
1. Introduction
Shareholders are referred to the announcement dated 14 June 2010 ("the
Announcement") released by the Company on SENS, containing details of the
Transaction.
This press release, which should be read in conjunction with the
Announcement, contains no more information than that contained in the
Announcement but seeks to highlight the value proposition of the
Transaction.
2. The value proposition
Set out below are the key value proposition drivers for the Transaction:
2.1 The Purchase Consideration, as defined in the Announcement, of R925
million, is based on a forward price:earnings ("PE") multiple of 7.28
times. This multiple is less than Avusa`s current PE multiple of
10.00 times, as quoted in the Business Day on Tuesday, 15 June;
2.2 The Purchase Consideration will be settled by Avusa by the issue of 20
555 555 new Avusa shares ("the Consideration Shares") to the Seller at
a price of 2 250 cents per Avusa share and a cash payment of R462 500
000. The closing price of Avusa shares on the JSE Limited on Friday,
11 June 2010, being the date before the Announcement was 1 821 cents
per Avusa share;
2.3 The allotment and issue of the Consideration Shares will result in the
Seller holding a 16.5% interest in Avusa. The Seller will furnish
Avusa with, or procure from the relevant parties, an irrevocable
undertaking, that each of the shareholders of the Seller shall not:
2.3.1 permit its respective shareholders to sell, cede or encumber
any of their shares in the shareholders of the Seller;
2.3.2 allot or issue any shares from its authorised share capital
to any other person,
for a period of three years from the date of implementation of the
Transaction, without the prior written consent of Avusa. The Seller
therefore represents a significant and stable shareholder in Avusa for
a three-year period, as well as providing Avusa with favourable BEE-
credentials, as discussed in paragraph 2.4 below;
2.4 The Seller is a BEE-controlled entity and it will provide an
irrevocable undertaking not to sell, cede or encumber the
Consideration Shares for a period of three years from the date of
implementation of the Transaction ("the BEE Lock-In"). Due to the BEE
Lock-In, the Transaction will result in Avusa`s BEE ownership points
per the relevant BEE scorecard being significantly enhanced;
2.5 The Transaction represents an attractive acquisition for Avusa for the
following reasons:
2.5.1 the UHC Business delivers a strong, resilient revenue base
and cash flows;
2.5.2 the UHC Business offers Avusa new revenue streams, with
presence in, inter alia, retail advertising production
systems and related database development and management;
2.5.3 the Transaction will allow Avusa to expand its markets and
market share as a result of the UHC Business`s exposure to
retail, liquor, beverage, fast moving consumer goods
supplier and manufacturer, financial and publication
markets, as well as its expertise in offering below-the-line
solutions;
2.6 The UHC Business:
2.6.1 is ungeared;
2.6.2 has an experienced management team; and
2.6.3 operates in markets least affected by economic cycles.
Johannesburg
15 June 2010
Investment bank, corporate adviser and sponsor to Avusa
Nedbank Capital, a division of Nedbank Limited
Date: 15/06/2010 16:26:01 Produced by the JSE SENS Department.
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