| Fri 6 Aug 2010, 14:47 | | JSC - Jasco - Jasco acquires the Snapper plug and accessory range |
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JSC - Jasco - Jasco acquires the Snapper plug and accessory range
JASCO ELECTRONICS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number: 1987/003293/06)
Share Code: JSC ISIN: ZAE000003794
(`Jasco` or `the Company`)
JASCO ACQUIRES THE SNAPPER PLUG AND ACCESSORY RANGE
1. INTRODUCTION
Jasco wishes to advise shareholders that it has entered into an exclusive
agreement (`the Agreement`) with Schneider Electrical SA (Proprietary)
Limited (`Schneider`) to acquire the assets, brand and the rights to
manufacture and supply the Snapper range of plug and accessory products
(`the Snapper Range`) for R7,5 million (`the Acquisition`).
2. BACKGROUND TO THE SNAPPER RANGE
The Snapper Range consists of 40 different electrical plugs, adaptors and
cord sets. The acquired range of products is SABS approved and has an
established market presence in South Africa, having been introduced to the
market more than 20 years ago. The South African market for plugs, adapters
and cord sets is estimated to be around R120 million per annum. It is
expected that the Snapper Range will enhance Jasco`s share of this market
to between 30% and 40%.
3. RATIONALE
3.1 The Acquisition broadens the Company`s Domestic Products division`s
product offering, by diversifying its risk in terms of both product
and client base. It will therefore provide a higher throughput and
result in economies of scale benefits for Domestic Products` existing
plant as no corresponding increase in capacity or operating cost is
required. The Snapper Range will also enhance Jasco`s T-Components
electrical plugs range and allow for an increased basket of products
to clients.
3.2 The Acquisition further provides Jasco`s Domestic Products division
with full control of the Snapper product range and access to the large
distributors of the product range into the market. During the last two
months Jasco approached the major distributors of the Snapper Range
products and the initial interest shown in the products is promising.
Jasco has already secured orders in excess of R5 million for various
products within the Snapper Range.
3.3 Although Jasco only acquired the underlying assets (namely the moulds,
registered patents, designs and trade marks), the contribution from
the Acquisition will immediately be earnings enhancing.
4. EFFECTIVE DATE
All conditions precedent have been met, with the effective date of the
Acquisition being 5 August 2010.
5. PURCHASE CONSIDERATION
The purchase consideration of R7.5 million will be discharged in cash
utilising a combination of the Company`s internal cash resources and
external borrowings. The purchase consideration is payable in three equal
instalments of R2,5 million. The first instalment is payable on the
effective date, the second instalment six months later and the final
instalment 12 months after the effective date.
6. FINANCIAL EFFECTS
Based on the latest unaudited management information provided to Jasco by
Schneider and after taking interest on the full purchase consideration and
transaction costs into account, the impact of the Acquisition on the
Company`s most recently published earnings per share, headline earnings per
share, net asset value per share and net tangible asset value per share,
namely for the six month period ended 31 December 2009, is not considered
to be significant.
7. CATEGORISATION
The Acquisition is categorised as a Category 2 transaction for purposes of
the Listings Requirements of the JSE Limited, as it constitutes just over
5% of Jasco`s current market capitalisation, and accordingly does not
require shareholder approval.
Johannesburg
6 August 2010
Sponsor
Grindrod Bank Limited
INCORPORATING: Webb Industries ; WebbLeBLANC ;Telesciences ; Maringo ; Special
Cables ; T-Components ; Multivid ; Scafell ; M-TEC ; Lighting Structures
www.jasco.co.za
Date: 06/08/2010 14:47:01 Produced by the JSE SENS Department.
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