Control Instruments - Disposal Of The Business Con
SERVICES (PROPRIETARY) LIMITED ("DATA PRO") TO PROSTART INVESTMENTS 19
(PROPRIETARY) LIMITED ("PROSTART") AND FURTHER CAUTIONARY
CONTROL INSTRUMENTS GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1964/003987/06)
("Control Instruments" or "the company")
DISPOSAL OF THE BUSINESS CONDUCTED BY DATA PRO SERVICES (PROPRIETARY)
LIMITED ("DATA PRO") TO PROSTART INVESTMENTS 19 (PROPRIETARY) LIMITED
("PROSTART") AND FURTHER CAUTIONARY
1. Introduction
Barnard Jacobs Mellet Corporate Finance (Proprietary) Limited is authorised
to announce that, further to the cautionary announcement dated 7 June 2001,
an agreement has been signed in terms of which Data Pro has, subject to the
fulfilment of the suspensive conditions set out in paragraph 2.3 below,
disposed of its internet connectivity service business ("the business")
through a management buy-out to Prostart, a private equity investment
company supported by BOE Limited with effect from 1 April 2001 ("the
disposal"). The business comprises its web development department, its sales
departments situated in Durban, Cape Town and Johannesburg, its technical
department and its administration department, but specifically excludes the
investment in On-Track.
2. The disposal
2.1 Terms
The disposal consideration is R30 000 000 payable in cash plus interest
thereon at 6,5% per annum compounded monthly in arrear, calculated from 1
April 2001 to the date of payment.
2.2 Rationale
Control Instruments has investments and business interests in both
automotive electronics and IT services. The directors believe that the
company should focus only on its automotive electronics investments and
business interests. The disposal affords Control Instruments the
opportunity to concentrate on the core business of the company.
2.3 Suspensive conditions
The disposal is conditional upon, inter alia:
approval of shareholders of Control Instruments in general meeting; and
approval by the JSE Securities Exchange South Africa ("JSE") as may be
required to give effect thereto.
2.4 Utilisation of the proceeds
The proceeds from the disposal will be utilised to fund the working capital
requirements of the core automotive electronics businesses of the company.
2.5 Warranties
The disposal will be subject to the normal warranties and indemnities in
transactions of this kind.
2.6 Financial effects of the acquisition
The table below sets out the pro forma financial effects of the disposal.
For the purposes of determining the earnings and headline earnings per
share, it has been assumed that the disposal had been effective for the
twelve month period ended 31 December 2000. The net asset value and net
tangible asset value per share has been calculated assuming the disposal
took place on 31 December 2000.
Before After Change
(cents) (cents) (%)
Headline earnings per share 6,8 14,6 115
Earnings per share 16,2 45,5 181
Net asset value per share 104 126 21
Net tangible asset value per share 75 99 32
Number of shares in issue (`000) 88 486 88 486 -
3. Circular to shareholders
A circular giving full details of the disposal and giving notice of a
general meeting to approve the disposal will be sent to shareholders within
28 days of this announcement.
4. Further cautionary announcement
Shareholders are advised to continue to exercise caution when dealing in
their Control Instruments securities on the JSE.
Cape Town
17 July 2001
Corporate adviser and sponsor Attorneys
Barnard Jacobs Mellet Corporate Finance Werksmans
BOE Equity Partners
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