| Mon 15 Nov 2010, 9:00 | | IQG - Iquad - Acquisition by Iquad Treasury Solutions (Pty) Limited of 100% of |
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IQG
IQG
IQG - Iquad - Acquisition by Iquad Treasury Solutions (Pty) Limited of 100% of
the issued share capital of Kagiso Treasury Solutions (Pty) Limited ("KTS")
IQuad Group Limited
Incorporated in the Republic of South Africa
Registration number: 2004/025177/06
Share code: IQG
ISIN: ZAE000101622
("IQuad" or "the Company")
ACQUISITION BY IQUAD TREASURY SOLUTIONS (PTY) LIMITED OF 100% OF THE ISSUED
SHARE CAPITAL OF KAGISO TREASURY SOLUTIONS (PTY) LIMITED ("KTS")
1. THE ACQUISITION
1.1 Shareholders are hereby advised that IQuad Treasury Solutions (Pty)
Limited ("the Purchaser"), a subsidiary of the Company, has entered
into an agreement with the management of KTS ("the Sellers"), in terms
of which the Sellers will dispose of the entire issued share capital
in KTS ("the Sale Shares"), to the Purchaser ("the Acquisition").
1.2 The Sellers have simultaneously with the conclusion of the agreement
referred to in paragraph 1.1, entered into a Sale agreement with
Kagiso Trust Investments (Pty) Limited, to acquire the Sale Shares
from Kagiso Trust Investments (Pty) Limited ("the KTS agreement"),
which will then be on-sold to the Purchaser as set out in paragraph
1.1 above.
1.3 The Sellers collectively consist of the following individuals, who
will hold the following proportionate interests in the issued share
capital of KTS:
1.3.1 Ajit Bhikhoobhai Bawa - 22% ("Bawa");
1.3.2 Sharon Ann Fraser - 26% ("Fraser");
1.3.3 Hermanus Johannes Geyer - 30% ("Geyer"); and
1.3.4 Anthony Rory Van Dyk - 22% ("Van Dyk").
2. BACKGROUND INFORMATION ON THE SELLERS
The Sellers are part of the senior management team of KTS and they will
continue their employment with KTS post the acquisition.
3. RATIONALE OF THE ACQUISITION
The consolidation of two respected competitors in this arena will
strengthen the market share of the Company in one of it`s key service
offerings. Both companies provide outsourced treasury risk management
services to a similar client base. We anticipate that the combined
management and improved utilisation of resources will result in a more
competitive service offering to our clients.
4. PURCHASE CONSIDERATION
The consideration payable by the Purchaser to the Sellers for the purchase
of the Sale Shares is the sum of R4 792 600 and shall be payable as
follows:
4.1 R3 582 987 ("the 1st Tranche") in cash, shall be immediately payable
on the signature date of the agreement and against delivery of the
documents of title relating to the Sale Shares to the Purchaser;
4.2 The balance of the purchase price, being R1 209 613 ("the 2nd
Tranche`) will be paid in cash on achievement of predefined
performance criteria. Failing such achievement, the 2nd tranche shall
be forfeited and the purchase price reduced to the amount of the 1st
tranche.
5 CONDITIONS PRECEDENT
5.1 The Acquisition is subject to the simultaneous conclusion of the KTS
agreement.
5.2 Warranties as are normal in transactions of this nature have been
provided by each of the Sellers, to the Purchaser.
6. PRO FORMA FINANCIAL EFFECTS
The pro forma financial effects of the Acquisition are presented for
illustrative purposes only and because of their nature may not give a fair
reflection of the Company`s financial position nor of the effect on future
earnings after the Acquisition.
Set out below are the unaudited pro forma financial effects of the
Acquisition, based on the unaudited interim results for the period ended 31
August 2010. The directors of IQuad are responsible for the preparation of
the unaudited pro forma financial information.
Unaudited Unaudited Change (%)
before Pro Forma
acquisition after
(cents) acquisition
(cents)
Basic earnings (90.1) (89.5) 0.7
per share
Basic headline 14.3 14.9 4.2
earnings per
share
Net asset value 377.8 377.8 0
per share
Net tangible 140.1 127.2 (9.2)
asset value per
share
Notes and assumptions:
1. The basic earnings per share and basic headline earnings per share
figures in the "Pro Forma after acquisition" column have been
calculated on the basis that the Acquisition was effected on 1 March
2010.
2. The net asset value per share and net tangible asset value per share
figures in the "Pro forma after acquisition" column have been
calculated on the basis that the Acquisition was effected on 31 August
2010.
3. The taxation rate applicable is assumed to be 28%.
4. The basic earnings per share and basic headline earnings per share
figures are calculated based on weighted average number of shares in
issue of 27 467 000 at 31 August 2010.
5. The net asset value per share and net tangible asset value per share
have been calculated based on 27 467 000 shares in issue at 31 August 2010.
7. EFFECTIVE DATE OF THE ACQUISITION
In terms of the agreement the effective date of the Acquisition is 1
September 2010.
8. CLASSIFICATION OF THE TRANSACTION
The Acquisition is classified as a Category 2 transaction in terms of the
Listings Requirements of the JSE Limited.
15 November 2010
Designated Adviser
QuestCo Sponsors (Pty) Limited
Corporate Adviser
PSG Capital (Pty) Limited
Date: 15/11/2010 09:00:04 Produced by the JSE SENS Department.
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