| Thu 22 Sep 2011, 16:00 | | IDE - Ideco Group Limited - Disposal of Ideco Biometric Security Solutions |
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IDE
IDE
IDE - Ideco Group Limited - Disposal of Ideco Biometric Security Solutions
(Pty) Limited and renewal of cautionary
Ideco Group Limited
Incorporated in the Republic of South Africa
Registration number 2001/023463/06
Share code: IDE
ISIN code: ZAE000107579
("Ideco" or "the Company")
DISPOSAL OF IDECO BIOMETRIC SECURITY SOLUTIONS (PTY) LIMITED AND RENEWAL OF
CAUTIONARY
1. INTRODUCTION
Ideco is pleased to announce that it has signed a sale of shares and
claims agreement ("the sale agreement"), dated 21 September 2011, with
Marius Coetzee (the "Purchaser"), in terms of which the Purchaser will
acquire the shares and claims in Ideco Biometric Security Solutions
(Proprietary) Limited ("IBSS") ("the Proposed Transaction") from the
Company.
2. THE PROPOSED TRANSACTION
2.1 BACKGROUND TO THE PROPOSED TRANSACTION
Ideco has taken the strategic decision to refocus its resources on
providing transaction based verification services to the African
market and therefore has decided to sell IBSS which is regarded as
non-core in terms of Ideco`s refocused strategy.
2.2 DESCRIPTION OF BUSINESS TO BE DISPOSED OF
IBSS provides a sophisticated support mechanism to the security
industry in South Africa through the supply, service and support of
biometric terminals for access control, time and attendance and
identity management through its partner distribution channels.
Furthermore, IBSS is the sole distributor of Safran Morpho
fingerprint biometric terminals in South Africa.
2.3 RATIONALE FOR THE PROPOSED TRANSACTION
During the past year the board of Ideco took the view that the
biometric terminal distribution business of IBSS has become non-core
to Ideco and as a result the board has taken the strategic decision
to dispose of its interest in IBSS.
It is a key objective for Ideco that IBSS carries on uninterrupted
and maintains its position in the market.
The Purchaser of IBSS is regarded as the preferred acquirer because
he understands the complexities of IBSS, he has already existing
relationships with Safran Morpho and can run IBSS independently from
Ideco. The Purchaser joined IBSS in 1998 and over the last few years
has been responsible for the daily management of IBSS.
2.4 PURCHASE CONSIDERATION FOR THE PROPOSED TRANSACTION
Ideco has disposed of its shares and claims in IBSS for a total
purchase consideration of R20.2 million, which shall be paid by the
Purchaser within 24 months of 1 August 2011 in accordance with the
agreed payment schedule.
2.5 CONDITIONS PRECEDENT
The Proposed Transaction is subject to, inter alia, the fulfillment
or waiver of the following conditions precedent:
a. all relevant resolutions have been adopted and steps have been
taken by the Purchaser and Ideco so as to enter into and
implement the Proposed Transaction;
b. IBSS has entered into employment agreements with a list of pre-
agreed employees currently employed by Ideco, which employment
agreements shall contain a non-compete clause;
c. Ideco has confirmed in writing that all the required approvals
of the JSE Limited ("JSE") have been obtained in relation to
the implementation of the Proposed Transaction;
d. Safran Morpho has confirmed in writing that Safran Morpho shall
continue to supply biometric readers to IBSS and provide
support to IBSS;
e. Ideco has transferred ownership of all the fixed assets, as
agreed to IBSS;
f. Ideco has transferred all licenses and/or ownership in and to
the intellectual property, it being specifically recorded that
Ideco has procured the consent of any third party required to
the extent that Ideco did not own any intellectual property
rights to IBSS;
g. an agreement has been entered into between the Purchaser and
Purchaser for the supply of biometric terminals, and has become
unconditional in all respects;
h. an agreement has been entered into between Ideco Biometrix
(Pty) Limited ("Biometrix") and IBSS and has become
unconditional in all respects, in terms of which Biometrix has
ceded and assigned to IBSS its rights and obligations in and to
the agreements with the agreed customers;
i. a cession in securitatem debiti in respect of the debtors of
IBSS in favour of Ideco has been entered into and become
unconditional in all respects, save to the extent that they may
be conditional upon the entering into of the sale agreement;
and
j. a general notarial bond over the stock of IBSS has been entered
into and become unconditional in all respects, save to the
extent that they may be conditional upon the entering into of
the sale agreement.
2.6 EFFECTIVE DATE
The effective date of the Proposed Transaction is, subject to the
fulfillment of the conditions precedent, 1 August 2011.
2.7 PROCEEDS OF THE PURCHASE CONSIDERATION
The board will carefully consider how the proceeds from the Proposed
Transaction should be deployed in order to enhance shareholder
value.
3. CIRCULAR TO IDECO SHAREHOLDERS
In terms of paragraph 21.10 of the JSE Listings Requirements, the
Proposed Transaction is categorised as a Category 1 transaction. Due to
the size of the Proposed Transaction shareholder approval is required and
a circular will be sent to shareholders in due course, containing a
notice of general meeting.
4. FURTHER CAUTIONARY
The pro forma financial effects of the Proposed Transaction have not yet
been finalised. Shareholders are therefore advised to continue exercising
caution when dealing in the Company`s securities until such information
is released.
For and behalf of the board.
Bryanston
22 September 2011
Designated Advisor and Transaction Advisor
QuestCo Sponsors (Pty) Limited
Date: 22/09/2011 16:00:02 Produced by the JSE SENS Department.
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