| Tue 3 Jul 2012, 17:14 | | DISPOSAL OF THE BUSINESS OF DELTEC POWER DISTRIBUTORS (PTY) LTD ('DELTEC POWER') |
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MMG
DISPOSAL OF THE BUSINESS OF DELTEC POWER DISTRIBUTORS (PTY) LTD ('DELTEC POWER')
MICROmega HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/003821/06)
Share code: MMG ISIN: ZAE000034435
('MICROmega')
DISPOSAL OF THE BUSINESS OF DELTEC POWER
DISTRIBUTORS (PTY) LTD ('DELTEC POWER')
1. INTRODUCTION Unadjusted Adjusted Change
MICROmega shareholders are advised that MICROmega has entered Notes
Audited Pro-forma (%)
into an agreement with Hudaco Trading (Pty) Ltd ('Hudaco Trading'), a Basic earnings per share
subsidiary of Hudaco Industries Limited, to dispose of the entire business 3 7.72 6.70 -13.16
('EPS') (cents)
of Deltec Power, a wholly owned subsidiary of MICROmega, as a going Basic earnings per share
concern, to Hudaco Trading, in accordance with the following terms and from continuing operations 3 38.15 37.14 -2.65
conditions ('the disposal'). ('EPSC') (cents)
Headline earnings per
2. NATURE OF THE BUSINESS OF DELTEC POWER AND RATIONALE FOR 3 20.94 14.41 -31.15
share ('HEPS') (cents)
THE DISPOSAL Net asset value per share
Deltec Power which includes a wholly owned subsidiary, Deltec Africa 4 307.11 313.30 2.02
('NAV') (cents)
(Pty) Ltd, distributes maintenance and lead-free batteries to, inter alia, Net tangible asset value per
the automotive industry. During the 2004 to 2008 period, MICROmega 5 232.54 242.23 4.17
share ('NTAV') (cents)
acquired a number of firms that operated within the automotive industry, Weighted average number
and whose products and services were thus complementary with those of 6 95 736 164 95 736 164
of shares
Deltec Power. However, subsequent thereto, MICROmega has refocused its Total number of shares in
attention on the information technology and support service businesses 6 94 294 494 94 294 494
issue
and has divested itself of several of the aforementioned acquisitions.
Accordingly, the disposal of Deltec Power falls in line with the current Notes:
strategy of MICROmega. 1. The figures in the 'Unadjusted Audited' column are extracted from
the published audited results of MICROmega for the year ended
3. PURCHASE CONSIDERATION AND TERMS OF THE DISPOSAL 31 December 2011 ('the 2011 results').
From the effective date, being 30 April 2012, the business of Deltec Power 2. The figures in the 'Adjusted Pro-forma' column reflect the impact of
has been sold to Hudaco Trading for a total purchase consideration the disposal on the 2011 results on the assumption that the effective
of R41 500 000 (forty one million five hundred thousand Rand). The date of the disposal was 1 January 2011 for purposes of calculation
total purchase consideration shall be payable in cash on the of EPS, EPSC and HEPS and 31 December 2011 for the purposes of
implementation date, being the second business day following the calculation of NAV and NTAV.
fulfilment or waiver of the outstanding suspensive conditions referred to 3. EPS, EPSC and HEPS calculations in the 'Adjusted Pro-forma' column
in paragraph 4 below. are based on the following assumptions:
- The net profit after tax of Deltec for the year ended 31 December
As the business of Deltec Power is being sold as a going concern, 2011 was R8 652 200.
the employees of Deltec Power will continue in their employment in - The headline earnings of Deltec for the year ended 31 December
accordance with section 197 of the Labour Relations Act, 1995. 2011 was R8 088 512.
- The disposal will result in a profit on disposal of the business of
The parties have agreed that the disposal shall not be advertised in R7 328 643.
accordance with section 34 of the Insolvency Act, 1936. - The cash proceeds of R41 500 000 were invested at an average after
tax interest rate of 4.32%.
4. CONDITIONS PRECEDENT 4. NAV is calculated assuming a net asset value of R289 584 833 for the
The disposal is subject to the fulfilment of the following remaining 'Unadjusted Audited' column and R295 425 466 for the 'Adjusted
suspensive conditions: Pro-forma' column with the adjustment comprising a R41 500 000
increase in cash balances and a decrease in other assets and liabilities
4.1 confirmation from Hudaco Trading that it is satisfied with the results of of R35 659 367.
the due diligence review; and 5. NTAV is calculated assuming a tangible net asset value of
4.2 conclusion of new lease agreements between Hudaco Trading and the R219 266 905 for the 'Unadjusted Audited' column and R228 407 538
landlord of the premises currently utilised by Deltec Power in Wynberg for the 'Adjusted Pro-forma' column with the adjustment comprising a
and Alrode. R41 500 000 increase in cash balances and a decrease in other tangible
assets and liabilities of R32 359 367.
These suspensive conditions have been stipulated for the benefit of Hudaco 6. The weighted average number of shares and the total number of shares
Trading and accordingly, Hudaco Trading is entitled to waive fulfilment in issue have not been adjusted as the number of shares in issue will not
of any of the abovementioned conditions. Competition Commission change as a result of the disposal.
approval for the disposal was received on 27 June 2012.
6. APPLICATION OF THE DISPOSAL PROCEEDS
5. FINANCIAL EFFECTS OF THE DISPOSAL The proceeds from the disposal will be reinvested into MICROmega's core
The table shows the per share effect of the disposal of Deltec Power for businesses. This will enable MICROmega to continue its market growth in
the year ended 31 December 2011. The pro-forma financial effects, which the services industries.
are the responsibility of the directors of MICROmega, have been prepared
for illustrative purposes only and, because of their nature, may not fairly 7. CATEGORISATION
present MICROmega's financial position as at 31 December 2011, or the In terms of the JSE Listings Requirements, the disposal is classified as a
effect of future earnings. The financial effects are determined in accordance category 2 transaction and therefore shareholder approval is not required.
with the JSE Listings Requirements.
3 July 2012 Sponsor
The pro-forma financial effects of the disposal have not been reviewed or
reported on by MICROmega's auditors. www.micromega.co.za
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