| Tue 24 Nov 2009, 13:15 | | BWI - B&W Instrumentation And Electrical Limited - |
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BWI
BWI
BWI - B&W Instrumentation And Electrical Limited - Acquisition By B&W Of The
Business Of Pontins And Withdrawal Of Cautionary Announcement
B&W INSTRUMENTATION AND ELECTRICAL LIMITED
Incorporated in the Republic of South Africa
(Registration number 2001/008548/06)
Share code: BWI ISIN: ZAE000098687
("B&W" or "the company")
ACQUISITION BY B&W OF THE BUSINESS OF PONTINS AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
1. INTRODUCTION
B&W shareholders are advised that an agreement has been reached between
Brightwater Trade and Invest 38 (Proprietary) Limited, a wholly owned
subsidiary of B&W, ("the purchaser") and Pontins (Proprietary) Limited
("Pontins") wherein the purchaser shall acquire the business of Pontins for
a purchase consideration of R19 213 698 (``the acquisition``).
2. THE ACQUISITION
2.1 Nature of the Pontins business
Founded in 1972, Pontins was established to fill a gap in the market
for the provision of lightning protection products and services for
offices, factories and shopping centres. Over the past 30 years,
Pontins has been at the forefront of earthing, lightning protection
and surge protection design and installation in the Southern Africa
region and as a result, has become extensively involved in the
draughting of many specifications and the implementation of codes of
practice in its industry.
2.2 The rationale for the acquisition
The acquisition will augment B&W`s existing electrical contracting
business with a complementary niche service.
2.3 Purchase consideration
R12 915 197 of the total purchase consideration of R19 213 698 will be
settled from the company`s cash resources, and the remaining R6 298
501 will be settled by way of issue of 4 373 959 B&W ordinary shares
to Pontins at an issue price of R1.44 per ordinary share, being the
closing price on the effective date.
In terms of restraint of trade agreements, a further R1 million has
been paid to each of the two shareholders of Pontins
2.4 Conditions precedent and effective date
The acquisition is conditional upon:
- the conclusion by Pontins of a written full and final settlement
agreement with the beneficiaries of the Pontins BEE Trust of any
claims which such beneficiaries may have against the Pontins BEE
Trust in order that the Pontins BEE Trust may be wound up;
- the passing by the shareholders of Pontins of the special
resolution required in terms of Section 228 of the Companies Act,
1973 (Act 61 of 1973), as amended, approving the disposal of the
Pontins business, and such special resolution being registered by
the Registrar of Companies;
- written consents being obtained from Pontins (Natal) CC and
Pontins (Natal) Investments CC, to the change of name of the
purchaser to Pontins (Proprietary) Limited;
- Pontins` auditors having reported on the effective date accounts
and having certified same without any qualifications; and
- the expiration of a period of 30 days from the date of the last
publication of the notices in terms of Section 34(1) of the
Insolvency Act, 1934 (Act 24 of 1934), as amended.
The effective and the closing dates of the acquisition are 30 June 2009 and
the first day of the month in which all the conditions precedent have been
fulfilled or waived, respectively.
3. PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION
The table below sets out the unaudited pro forma financial effects of the
acquisition, on B&W`s earnings per share, headline earnings per share, net
asset value per share and tangible net asset value per share.
The unaudited pro forma financial effects have been prepared to illustrate
the impact of the acquisition on the reported financial information of B&W
for the year ended 31 August 2009, had the acquisition occurred on 1
September 2008 for income statement purposes and on 31 August 2009 for
balance sheet purposes.
The unaudited pro forma financial effects have been prepared using
accounting policies that comply with International Financial Reporting
Standards and that are consistent with those applied in the audited results
of B&W for the year ended 31 August 2009.
The unaudited pro forma financial effects, which are the responsibility of
the directors, are provided for illustrative purposes only and, because of
their pro forma nature may not fairly present B&W`s financial position,
changes in equity, results of operations or cash flow.
Before the After the Percen-
acquisition acquisition tage
change
(%)
Earnings per share (cents) 29.6 30.5 3.0
Headline earnings per share (cents) 29.8 30.6 2.7
Net asset value per share (cents) 78.0 79.1 1.4
Tangible net asset value per share 78.0 73.7 (5.5)
(cents)
Weighted average number of shares in 200 000 204 374 2.2
issue (000`s)
Notes:
1. The amounts in the "Before the acquisition" column have been extracted
from the audited results of B&W for the year ended 31 August 2009.
2. The amounts in the "After the acquisition" column reflect the
financial effects of the acquisition on B&W and include transaction
costs and the amortisation of the restraint of trade agreements.
3. The effects on earnings per share and headline earnings per share are
calculated based on the assumption that the acquisition was effected
on 1 September 2008.
4. The effects on net asset value per share and tangible net asset value
per share are calculated based on the assumption that the acquisition
was effected on 31 August 2009.
4. CLASSIFICATION OF THE ACQUISITION
The acquisition is classified as a Category 2 announcement in terms of the
Listings Requirements of the JSE.
5. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Further to the above, shareholders are advised that they no longer need to
exercise caution when dealing in the shares of B&W.
24 November 2009
Designated Adviser
Merchantec Capital
Date: 24/11/2009 13:15:01 Produced by the JSE SENS Department.
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