| Thu 3 May 2012, 10:19 | | SDH - Securedata Holdings Limited - Disposal of SD |
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SDH
SDH
SDH - Securedata Holdings Limited - Disposal of SDH UK Limited and withdrawal
of cautionary announcement
SECUREDATA HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/010017/06)
Share code: SDH ISIN: ZAE000096368
("SecureData" or "the Company")
DISPOSAL OF SDH UK LIMITED AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Further to the cautionary announcement dated 21 January 2012, and the
subsequent renewal of cautionary announcements, the most recent of which was
dated 19 April 2012, the board of directors of SecureData ("the Board")
hereby notifies shareholders that a Sale and Purchase Agreement ("the
Agreement") was entered into on 2 May 2012 between a recently established
special purpose vehicle, SDH Bidco Limited ("the Purchaser") and SecureData,
MIS Nominees Limited ("MIS Nominees``), Etienne Greeff ("Greeff") and Matthew
Charles Tomlinson ("Tomlinson") (Greeff and Tomlinson collectively referred
to hereafter as "the Management Vendors"), SensePost UK Limited and Johan du
Toit, Interim Chief Executive Officer and Finance Director of the Company
("du Toit"), in terms of which, subject to the fulfilment or waiver of the
conditions precedent set out in paragraph 5 below, SecureData, MIS Nominees
and the Management Vendors (together "the Vendors") will dispose of 100% of
the issued share capital of SDH UK Limited ("the SDH UK Shares") ("SDH UK")
to the Purchaser, who will also acquire certain A Loan Stock and B Loan Stock
("Loan Stock") on a Pound for Pound basis, for a total consideration of GBP16
621 000, which includes an adjustment for working capital and cash ("the SDH
UK Disposal").
1. Introduction
SDH UK, which is incorporated in the United Kingdom ("UK"), is an 80.8%
owned subsidiary of SecureData. The directors of SDH UK are Greeff,
Tomlinson and du Toit. Greeff and Tomlinson currently hold 10.0% and
8.0% of the issued share capital of SDH UK, respectively, while the
remaining 1.2% is held by a number of existing employees of SDH UK
through MIS Nominees.
In order to effect the acquisition of the SDH UK Shares and the Loan
Stock, the Purchaser intends to obtain funding from, inter alia, a UK
based investment fund managed by August Equity LLP ("August Equity").
Andrew Cooke ("Cooke``), a director of SecureData Europe Limited which
is a wholly-owned subsidiary of SDH UK, together with the Management
Team, intend to obtain an equity stake in the Purchaser.
2. Nature of and rationale for the SDH UK Disposal
SDH UK was originally established in 2008 as the special purpose vehicle
subsidiary of SecureData through which the Company, together with
Greeff, Tomlinson, du Toit and MIS Nominees acquired 100% of the issued
share capital of SecureData Europe Limited (formerly MIS Corporate
Defence Solutions Limited) ("SecureData Europe") at a sale price of
GBP13 400 000.
Founded in 1992 as an independent security consultancy, SecureData
Europe, which is a wholly-owned subsidiary of SDH UK, has close to two
decades` experience in providing companies with bespoke IT security
solutions. After 19 years of supplying security advice, services and
technology, SecureData Europe is the longest standing IT security-
specific organisation in the UK and has provided numerous secure
solution deployments across Europe and the USA.
Although it is primarily known as a managed service company specialising
in security, SecureData Europe also provides recognised and established
monitoring services, offering the industry`s most thorough monitoring,
responsive service levels and in-depth analysis for a significant and
diverse array of both security and network devices.
The acquisition of SecureData Europe, which was in line with the
Company`s then strategy to become a meaningful provider of information
risk management solutions and products within Europe, the Middle East
and Africa, was approved by the Board on the premise that, despite the
relocation of the former Chief Executive Officer of the Company to the
UK, its African operations, through SecureData Africa, would remain
management`s primary focus.
However, notwithstanding SecureData Europe`s noteworthy performance over
the past four years, a lack of focus on SecureData Africa has resulted
in a significant reduction in profitability for the group. Consequently,
SecureData`s share price has declined to a value significantly lower
than the intrinsic value of its underlying operations and as a result,
the Board has resolved to dispose of SDH UK, and to once again focus on
its African operations.
3. Consideration
The total consideration, payable by the Purchaser to the Vendors for the
SDH UK Shares and the Loan Stock, is GBP16 621 000 and is payable in
full on the completion date, being the fifth business day following the
fulfilment or waiver of the conditions precedent set out in paragraph 5
below. The Board is currently investigating options to return surplus
cash to shareholders.
The total consideration is comprised of:
- the SecureData Consideration, being GBP14 504 007 which is payable
in cash by the Purchaser to SecureData for its respective
percentage holding in the SDH UK Shares and its Loan Stock;
- the Management Consideration, being GBP1 978 836 which is payable
by the Purchaser (in cash as to GBP841 217 and the issue of Loan
Stock of the Purchaser in respect of GBP1 137 619) to the
Management Vendors in proportion to their respective percentage
holdings in the SDH UK Shares and their Loan Stock; and
- the MIS Nominees Consideration, being GBP138 157 which is payable
by the Purchaser (in cash as to GBP57 997 and the issue of Loan
Stock of the Purchase in respect of GBP80 160) to MIS Nominees in
proportion for its respective percentage holding in the SDH UK
Shares and its Loan Stock.
4. Related parties
As a result of Greeff, Tomlison and Cooke being directors of SDH UK and
SecureData Europe, which are subsidiaries of the Company, they are
defined as `related parties` in terms of paragraph 10.1(b) of the
Listings Requirements of the JSE Limited ("JSE"), and as a result, the
SDH UK Disposal constitutes a Related Party Transaction.
Accordingly, the Board has retained the services of Merchantec
Proprietary Limited, as the independent professional expert for the
purposes of providing an opinion on the SDH UK Disposal.
The opinion of the independent professional expert will be included in
the circular to be distributed to SecureData shareholders as set out in
paragraph 7 below.
5. Effective date and conditions precedent
The effective date of the SDH UK Disposal is 30 April 2012.
The SDH UK Disposal is subject to the fulfilment or waiver of the
following conditions precedent by 13 July 2012:
- the Board passing a resolution to approve the SDH UK Disposal;
- approval of the SDH UK Disposal by the JSE and the South African
Reserve Bank; and
- shareholders of SecureData in general meeting passing the
resolutions necessary to give effect to the SDH UK Disposal in
accordance and compliance with the relevant requirements of the
Companies Act, 2008 (Act 71 of 2008), as amended ("Companies Act")
and the Listings Requirements of the JSE.
6. PRO FORMA FINANCIAL EFFECTS
The table below sets out the unaudited pro forma financial effects of
the SDH UK Disposal on SecureData`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 SDH UK Disposal on the reported financial
information of SecureData for the six months ended 31 January 2012, had
the SDH UK Disposal occurred on 1 August 2011 for statement of
comprehensive income purposes and on 31 January 2012 for statement of
financial position 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 SecureData for the twelve months ended 31 July 2011 as well
as the six months ended 31 January 2012.
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 SecureData`s
financial position, changes in equity, results of operations or cash
flow.
Before the After the %
SDH UK SDH UK chang
Disposal Disposal e
Basic earnings per share 3.9 (0.2) (106)
(cents)
Headline earnings per share 3.9 (0.2) (106)
(cents)
Net asset value per share 70.5 77.0 10
(cents)
Tangible net asset value per 0.1 58.8 42
share (cents) 014
Weighted average number of 228 395 228 395 -
shares in issue (000`s)
Total number of shares in issue 246 320 246 320 -
(000`s)
Notes:
1. The amounts in the "Before the SDH UK Disposal" column have been
extracted from the reviewed interim results of SecureData for the
six months ended 31 January 2012.
2. The amounts in the "After the SDH UK Disposal" column reflect the
financial effects of the SDH UK Disposal on SecureData.
3. The effects on basic earnings per share and headline earnings per
share are calculated based on the assumption that the SDH UK
Disposal was effected on 1 August 2011.
4. The effects on net asset value per share and tangible net asset
value per share are calculated based on the assumption that the SDH
UK Disposal was effected on 31 January 2012.
7. CATEGORISATION OF THE SDH UK DISPOSAL AND FURTHER DOCUMENTATION
The SDH UK Disposal constitutes a Category 1 transaction in terms of
section 9.5(b) of the JSE Listings Requirements and a Related Party
Transaction in terms of section 10.1(b)(ii) of the JSE Listings
Requirements.
Accordingly, a circular containing full details of the proposed SDH UK
Disposal including, inter alia, a notice to convene a general meeting of
SecureData shareholders in order to consider and, if deemed fit to pass,
with or without modification, the resolutions necessary to approve and
implement, inter alia, the SDH UK Disposal, will be distributed to
SecureData shareholders on or about 1 June 2012.
8. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Following the publication of this announcement, shareholders are advised
that caution is no longer required to be exercised by shareholders when
dealing in the securities.
3 May 2012
Sponsor
Merchantec Capital
Auditors and Reporting Accountants
Grant Thornton
Date: 03/05/2012 10:00:02 Produced by the JSE SENS Department.
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