| Fri 29 Jun 2001, 0:00 | | Acquisition Of Alacrity Financial Solutions (pty) |
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Alacrity Financial Services Limited
(Incorporated in the Republic of South Africa)
(Registration number 1994/00078/06)
(Alacrity)
Acquisition of Alacrity Financial Solutions (Pty) Ltd
ABN AMRO Securities (South Africa)(Proprietary) Limited is authorised to
announce that subject to the condition precedent set out in paragraph 5
below, Alacrity has acquired the entire issued ordinary share capital of
Alacrity Financial Solutions (Proprietary) Limited (FINANCIAL SOLUTIONS)
from the vendors, Stephanus Johannes Kruger, Christoffel Petrus Jochemus
Serfontein, Jacobus Frederik Roode, Hercules Philippus Roesch, Petrus
Arnoldus Strydom, Brenda Potgieter, Julinda Swanepoel and Susanna Cornelia
Grobler, with effective date 1 July 2001.
1. ALACRITY FINANCIAL SOLUTIONS (PROPRIETARY) LIMITED
FINANCIAL SOLUTIONS was registered as a shelf company, Investment Facility
Company 756 (Proprietary) Limited, in 1998. On 25 June 2001 FINANCIAL
SOLUTIONS changed its name to Alacrity Financial Solutions (Proprietary)
Limited and acquired as going concerns the entire businesses of De Wet De
Villiers Financial Services CC (FS) and De Wet De Villiers Benefit
Administrators CC (BA). FS and BA were incorporated in 1990 and 1997
respectively and operated primarily within the employee benefits industry
offering health care, pension, life and financial planning services. FS and
BA's combined audited gross commission received for the year ended
31 December 2000 was R6,3 million, representing an after tax profit of
R507 007.
2. RATIONALE
FINANCIAL SOLUTIONS will form the core of the employee benefits division of
Alacrity. Its expertise will manage employee benefits on a large scale. The
acquisition of FINANCIAL SOLUTIONS forms part of Alacrity's strategy to, in
addition to organic growth, prosper through acquisitions. With this
acquisition Alacrity has now all the disciplines on board to provide the
full range of insurance broking and risk management services to its client
base.
3. THE ACQUISITION
The effective date of the acquisition is 1 July 2001. The total maximum
purchase consideration, including all possible earnouts, for the acquisition
of FINANCIAL SOLUTIONS is R8 222 500. Once the condition precedent has been
met, the purchase consideration will be paid as follows:
- an initial cash consideration of R1 430 000 payable within five days after
the date by which the condition precedent has been met;
- a further cash payment of R1 430 000 three months after the date by which
the condition precedent has been met;
- R1 430 000 payable by way of an issue of a 2 860 000 new ordinary par
value shares of 1 cent each in Alacrity at 50 cents per share within five
days after the date by which the condition precedent has been met;
- the maximum balance of R3 932 500 is payable by way of a final issue of a
sufficient number of new ordinary par value shares of 1 cent each in
Alacrity, at the average of 50 cents per share and the weighted average
ruling price of Alacrity shares for the thirty trading days prior to the
date twelve months after the effective date of the acquisition with a
minimum value of 50 cents per share, on an earnout basis dependent on the
turnover and the after tax profit reported by FINANCIAL SOLUTIONS for the 12-
month period ending 30 June 2002.
4. FINANCIAL EFFECTS
Per Alacrity ordinary share Before After Percentage change
(cents)
Earnings per share 1,6 1,8 12,5
Headline earnings per share 1,3 1,6 23,1
Net asset value 12,3 9,7 (21,1)
Net tangible asset value 7,9 5,5 (30,4)
The before effects are based on the Alacrity audited financial statements
for the year ended 31 December 2000 and 137 617 737 shares in issue.
The after effects of the FINANCIAL SOLUTIONS acquisition are based on the
Alacrity audited financial statements for the year ended 31 December 2000
and the audited financial statements of FS and BA combined for the year
ended 31 December 2000 on the assumption that the acquisition was effective
1 January 2000, taking into account the maximum potential number of
148 342 737 shares in issue after the acquisition.
5. CONDITION PRECEDENT
The acquisition of FINANCIAL SOLUTIONS is subject to the following condition
precedent:
- the approval by the JSE Securities Exchange South Africa of the listing of
a maximum of 10 725 000 new ordinary par value shares of 1 cent each in
Alacrity in terms of the acquisition agreement.
Johannesburg
29 June 2001
Sponsor Reporting accountants
ABN AMRO SECURITIES ANTON HAYWARD CHARTERED ACCOUNTANTS
