| Wed 7 Sep 2011, 15:09 | | BSR - Basil Read Holdings Limited - Acquisition of 52% interest in Central |
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BSR
BSR
BSR - Basil Read Holdings Limited - Acquisition of 52% interest in Central
Systems Proprietary Limited
Basil Read Holdings Limited
(Incorporated in the Republic of South Africa)
Registration Number 1984/007758/06
Share Code: BSR ISIN: ZAE000029781
("Basil Read" or "the Company")
ACQUISITION OF 52% INTEREST IN CENTRAL SYSTEMS PROPRIETARY LIMITED
1. Introduction
The board of directors of Basil Read is pleased to announce that the
company, through its wholly owned subsidiary Basil Read (Pty) Ltd or any
other subsidiary nominated by Basil Read (Pty) Ltd, entered into an
agreement on Monday, 05 September 2011, with the Purple Trust, the GRCS
Trust, Seafire Holdings (Pty) Ltd ("Seafire") and Mathew Reid Project
Management (Pty) Ltd ("Mathew Reid"), collectively the "vendors", to acquire
a 52% equity interest in the share capital of Central Systems (Pty) Limited
("Central Systems") for a total consideration of AUD15 million (the
"consideration") (the "acquisition").
2. Rational for the acquisition and description of the business of Central
Systems
Central Systems is a profitable business and is anticipated to be earnings
accretive for Basil Read. The acquisition is in line with the company`s
stated intention of growing by acquisition as well as organically into
markets outside of South Africa.
Central Systems` core services revolve around civil and remedial
construction contracting services to create and extend the life of building
structures, infrastructure and industrial assets. Central Systems has an
enviable track record for precision and quality of workmanship. With over
100 years of combined management experience, the company is at the forefront
of new technologies and applications. Next to safety and quality, client
focus is central to the company`s core operating philosophy and the company
takes pride in providing unique solutions to meet clients` needs.
Central Systems has fulfilled key project roles in the construction of power
stations, liquefied natural gas plants, chemical manufacturing facilities,
iron ore processing and handling projects, road and rail bridges, and
jetties and wharfs.
The objectives of Central Systems are to:
- provide specialist maintenance, minor works and refurbishment services
to existing structures and buildings;
- provide specialist civil remedial services to the industrial sector for
existing structures and buildings;
- provide specialist ancillary services to the construction sector for
new structures and buildings; and
- provide general and specialist civil and concrete construction
services.
3. Effective date
The effective date of the acquisition is the first day of the calendar month
following the date on which all the conditions precedent, set out in
paragraph 5 below, have been fulfilled ("effective date"). The effective
date is expected to be on or around 1 November 2011.
4. The consideration
Under the terms of the acquisition agreement the consideration will be
settled as follows:
- AUD10 million will be payable in cash by Basil Read to the vendors on
the effective date; and
- the balance of AUD5 million will be payable in cash by Basil Read to
the vendors 28 days post receipt by Basil Read of the Audited Financial
Statements of Central Systems for the year ended 30 June 2012, expected
to be on or around 1 September 2012.
The consideration will be funded through Basil Read banking facilities.
5. Conditions precedent
The acquisition is subject to conditions that are considered normal for a
transaction of this nature, of which the following remain outstanding:
- finalisation and execution of definitive documentation to effect the
acquisition, comprising:
- a share sale and purchase agreement between the vendors and Basil
Read;
- a shareholders` agreement between Central Systems, Basil Read and
the vendors;
- executive service contracts between Central Systems and each of
Messrs. Richard Eden, Ivan Ruefli and Gary Reid; and
- the conclusion of restraint of trade agreements between Central
Systems, Basil Read and each of Messrs. Richard Eden, Ivan Ruefli,
Andrew Ellison, Gary Reid, as well as the Purple Trust, the GRCS
Trust, Seafire and Mathew Reid,
- each of the boards of directors of Basil Read, Seafire and Mathew Reid,
as well as each of the trustees of the Purple Trust and the GRCS Trust,
approving the transaction;
- Exchange control approval being obtained from the Reserve Bank of South
Africa on terms acceptable to Basil Read, including the associated
transfer of any funds from South Africa to Australia, and any
associated offshore borrowing of funds by Basil Read;
- receipt of all necessary change of control consents in a form
satisfactory to Basil Read; and
- receipt of all necessary regulatory approvals, including, but not
limited to formal approval being obtained from JSE Limited ("JSE").
6. Categorisation of the acquisition
The acquisition is deemed to constitute a Category 2 transaction as defined
under the provisions of the Listings Requirements of the JSE.
7. Cautionary announcement
Shareholders are advised to exercise caution when dealing in the company`s
securities until a further announcement, containing the pro forma financial
effects relating to the acquisition is released in due course.
Johannesburg
7 September 2011
JSE Sponsor: Macquarie First South Capital (Pty) Limited
Date: 07/09/2011 15:09:01 Produced by the JSE SENS Department.
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