| Tue 26 Oct 2010, 17:23 | | JSC - Jasco - Pro Forma financial effects announcement and withdrawal |
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JSC - Jasco - Pro Forma financial effects announcement and withdrawal
of cautionary announcement to Jasco shareholders
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")
PRO FORMA FINANCIAL EFFECTS ANNOUNCEMENT AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT TO JASCO SHAREHOLDERS
1. INTRODUCTION
1.1 Jasco ordinary shareholders ("Jasco Shareholders") are referred to
the announcement regarding a firm offer (the "Firm Offer") by Jasco to
acquire the entire issued share capital of Spescom Limited and its
subsidiaries ("Spescom") ("the Transaction"), released on the
Securities Exchange News Service of the JSE Limited on 3 September
2010, and in the press on 6 September 2010.
1.2 Jasco is proposing a scheme of arrangement between Spescom and
Spescom Shareholders, in terms of section 311 of the Companies Act,
1973 (Act 61 of 1973), as amended, for the purpose of acquiring the
entire issued share capital of Spescom. The Firm Offer will be
discharged by issuing 31 889 901 new Jasco ordinary shares at a switch
ratio of 1 Jasco ordinary share for every 2.47 Spescom ordinary shares
held by Spescom Shareholders, plus a cash consideration of 15 cents per
share, totaling R11,815,208.
2. UNAUDITED PRO FORMA FINANCIAL EFFECTS
2.1 The following unaudited pro forma financial effects, which have
been prepared by and are the responsibility of the directors of
Jasco, are presented for illustrative purposes only to show the
effects of the Transaction and because of their nature, may not
give a fair reflection of the financial position or the effect of
future earnings on Jasco.
Jasco 30 June %
Actual 2010 change
Before Pro forma
(1)(2) After
(1)
Earnings per share 19,1 40,9 114.1%
("EPS")(cents)(3)(4)
Headline earnings per share 16,6 16,0 (3.6)%
("HEPS") (cents) (3)(4)
Diluted earnings per share 18,3 39,6 116.4%
(cents) (3)(4)
Diluted headline earnings per 15,9 15,5 (2.5)%
share (cents) (3)(4)
Net Asset Value per share 251,1 248.0 (1.2)%
("NAVPS") (cents) (5)
Net Tangible Asset Value per 184,5 180,4 (2.2)%
share ("NTAVPS")(cents) (5)
Number of shares in issue 114 509 146 399 27.8%
(`000)
Weighted average number of 111 557 143 447 28.6%
shares (`000)
Weighted average number of 116 458 148 438 27.5%
shares that diluted EPS and
HEPS are based on (`000`)
Notes:
1. The unaudited pro forma financial effects are based on the
accounting policies adopted by the Company and are in accordance with
IFRS.
2. The `before` column has been extracted without adjustment from the
published audited condensed consolidated results of Jasco for the year
ended 30 June 2010.
3. The pro forma financial information of Spescom has been compiled
on a rolling 12 months basis by aggregating the published audited
condensed results of Spescom for the 12 months ended 30 September 2009
and the published unaudited interim results of Spescom for the 6 months
ended 31 March 2010 and deducting from these aggregated figures, the
published unaudited interim results for the 6 months ended 31 March
2009.
4. For purposes of calculating EPS and HEPS, the unaudited pro forma
adjustments to the consolidated statement of comprehensive income are
calculated on the following assumptions:
a) the Transaction was implemented on 1 July 2009 for a 12 month
period, resulting in the issue of 31,889,901 new Jasco ordinary shares
and the payment of the cash portion of the purchase consideration of
R11,815,208;
b) once-off Transaction costs of R4,455,000 incurred by Jasco,
and settled in cash, are charged to the statement of
comprehensive income in accordance with IFRS 3 (Revised):
Business Combinations;
c) the ongoing funding cost associated with the R11,815,208 part cash
purchase consideration and the once-off Transaction costs of R4,455,000
result in an interest charge of R1,464,300 at an annualised rate of 9%
p.a.;
d) neither the Transaction costs nor the interest costs are tax
deductible as they are capital in nature;
e) the Transaction has been accounted for in terms of the IFRS 3
(Revised): Business Combinations as the expected effective date is
within the current financial period of Jasco; and
f) a fair value profit of R33,474,000 has been calculated as the
excess of the fair value of the tangible and identifiable intangible
assets and liabilities of Spescom based on a preliminary purchase price
allocation exercise performed immediately before the date of this
announcement, versus the purchase consideration. In terms of IFRS 3
(Revised):
Business Combinations, for purposes of the preliminary purchase
price allocation exercise, the fair value of the purchase
consideration has been calculated as the cash consideration of
R11,815,208 and the 31 889 901 new Jasco shares to be issued,
multiplied by a Jasco share price of 132 cents, being the 60
day volume weighted average price of Jasco shares the day
before this announcement. A final purchase price allocation
exercise will be performed on the effective date of the
Transaction using the ruling share price of Jasco shares at
that time. These adjustments will have a once-off effect.
5. For purposes of calculating NAVPS and NTAVPS, the unaudited
pro forma adjustments to the consolidated statement of
financial position are calculated on the following assumptions:
a) the Transaction was implemented on 30 June 2010, which
resulted in the Company issuing 31 889 901 new Jasco
ordinary shares, and paying R11,815,208 in cash by
utilising existing interest bearing borrowings on the
effective date, to acquire 100% of the issued ordinary
share capital of Spescom;
b) standard consolidation journal entries in terms of IFRS
which include inter alia the elimination of Spescom`s `at
acquisition` share capital and share premium of R45, 283,000,
non-distributable reserves of R8,643,000 and retained profit
of R34,878,000 are passed on consolidation;
c) share capital and Share premium have been increased
by R318,899 and R41,776,101 respectively to reflect the
issue of 31 889 901 new Jasco shares;
d) once-off Transaction costs of R4,455,000 are funded by utilising
existing interest bearing borrowings;
e) the provisions raised of R1,420,000 relate to fair value
adjustments to current liabilities;
f) a fair value profit (negative goodwill) of R33,474,000
arises on consolidation of the investment in Spescom and is
accounted for in the current year profit in terms of IFRS 3
(Revised):Business Combinations. The fair value profit of
R33,474,000 was calculated as the excess of the fair value
of the tangible and identifiable intangible assets and
liabilities of Spescom based on a preliminary purchase price
allocation exercise performed immediately before the date of
this announcement, versus the purchase consideration.
In terms of IFRS 3 (Revised): Business Combinations, for
purposes of the preliminary purchase price allocation
exercise, the fair value of the purchase consideration
has been calculated as the cash consideration of R11,815,208
and the 31 889 901 new Jasco shares to be issued, multiplied
by a Jasco share price of 132 cents, being the 60 day volume
weighted average price of Jasco shares the day before the
date of this announcement. A final purchase price allocation
exercise will be performed on the effective date of the
Transaction using the ruling share price of Jasco shares
at that time. These adjustments will have a once-off effect.
3. WITHDRAWAL OF JASCO CAUTIONARY ANNOUNCEMENT
As the pro forma financial effects have been announced, Jasco
Shareholders are hereby advised that caution need no longer be
exercised when dealing in their Jasco securities.
Johannesburg
26 October 2010
Investment Bank, Corporate Adviser and Sponsor to Jasco
Grindrod Bank Limited
Independent reporting accountant to Jasco
Ernst & Young Inc.
Date: 26/10/2010 17:23:34 Produced by the JSE SENS Department.
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