| Tue 18 Jan 2011, 16:52 | | PSV - PSV Holdings Limited - Financial effects of the acquisition of Turbo |
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PSV
PSV
PSV - PSV Holdings Limited - Financial effects of the acquisition of Turbo
Agencies (Pty) Limited and withdrawal of the cautionary announcement
PSV HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/004365/06)
JSE code: PSV
ISIN: ZAE000078705
("PSV" or "the company")
FINANCIAL EFFECTS OF THE ACQUISITION OF TURBO AGENCIES (PTY) LIMITED AND
WITHDRAWAL OF THE CAUTIONARY ANNOUNCEMENT
INTRODUCTION
Shareholders are referred to the announcement, dated 22 November 2010,
regarding the sale agreement entered into between the company and Earthwize
Environmental Services (Pty) Limited, Keith and Carol Parry, Turbo Agencies
(Pty) Limited ("Turbo"), Turbo Agencies Zambia Limited and Turbo Agencies
(DRC) SPRL. In terms of the agreement, PSV will acquire the entire issued
share capital of Turbo and all claims on the effective date for a
consideration of R24 million ("the transaction").
RATIONALE FOR THE TRANSACTION
The transaction will extend PSV`s African footprint. Although PSV and Turbo
have certain common clients, PSV will be able to leverage off Turbo`s
customer network with the range of PSV products. PSV`s products will also
boost the product range for Turbo across Botswana, Zambia and the DRC.
UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTION
The unaudited pro forma financial effects of the transaction, for which the
directors are responsible, are provided for illustrative purposes only to
show the effect of the transaction on earnings per share ("EPS"), diluted
earnings per share ("DEPS"), headline earnings per share ("HEPS") and diluted
headline earnings per share ("DHEPS") as if the transaction had taken effect
on 1 March 2010 and on net asset value per share("NAVPS") and net tangible
asset value per share ("NTAVPS") as if the transaction had taken effect on 31
August 2010. Because of their nature, the unaudited pro forma financial
effects may not give a fair presentation of the group`s financial position
and performance. The unaudited pro forma financial effects have been
compiled from the unaudited consolidated financial results for the six months
ended 31 August 2010 and are presented in a manner consistent with the format
and accounting policies adopted by PSV and have been adjusted as described in
the notes below:
%
Notes Before After change
EPS (cents) 2 1.48 2.00 35.1
HEPS (cents) 2 1.30 1.84 41.5
DEPS (cents) 2 1.45 1.96 35.2
DHEPS (cents) 2 1.27 1.81 42.5
NAVPS (cents) 3 62.30 52.59 (15.6)
NTAVPS (cents) 3 39.01 29.08 (25.5)
Shares in issue at period end
(000) 247 962 292 406 17.9
Weighted average number of shares
in issue (000) 247 962 297 622 17.6
Fully diluted weighted average
number of shares in issue (000) 253 178 292 406 17.9
Notes:
1. The "Before" column has been extracted from the unaudited results of PSV
for the six months ended 31 August 2010.
2. The information relating to Turbo has been extracted the audited group
financial statements of Turbo for the year ended 28 February 2010 and
pro-rated for six months for income statement purposes.
3. EPS, DEPS, HEPS and DHEPS effects, as reflected in the "After" column,
are based on the following assumptions and information:
- the transaction was effective 1 March 2010;
- the cash portion of the purchase price of R12 million, as well as
transaction costs of R0.7 million, were paid on 1 March 2010 in
cash, financed entirely through borrowings incurring interest at
11.6% per annum (pre tax);
- 44 444 444 PSV shares were issued to the vendors on 1 March 2010,
settling the entire remainder of the purchase consideration of R12
million at 27 cents per share;
- the total after tax profit attributable to the acquired business is
R3.7 million for six months; and
- all adjustments, except those relating to transaction costs (which
were expensed), are regarded as being of a recurring nature.
4. NAVPS and TNAVPS effects, as reflected in the "After" column, are based
on the following assumptions and information:
- the transaction was effective 31 August 2010;
- the purchase price and transaction costs were paid on 31 August
2010 in the manner described in note 2 above; and
- net tangible assets acquired are R13 million and the excess of the
purchase price over this will comprise intangibles of R3.3 million,
amortised over a period of five years, and goodwill of R7.7
million, which is not amortised.
TRANSACTION CATEGORISATION
The agreement was amended to reflect the fact that PSV will not issue more
than 70 588 235 million shares in total as consideration (in addition to the
R12 million cash payment) and therefore the transaction is classified as a
category 2 transaction in terms of the JSE Limited Listings Requirements and,
as a result, shareholder approval is not required.
WITHDRAWAL OF THE CAUTIONARY ANNOUNCEMENT
Pursuant to the release of the financial effects of the transaction, the
cautionary announcement is hereby withdrawn.
Johannesburg
18 January 2011
Designated Adviser
Vunani Corporate Finance
Date: 18/01/2011 16:52:01 Produced by the JSE SENS Department.
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