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Comparex - Revised terms in respect of the Comparex Europe disposal
Comparex Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1994/002506/06)
("Comparex" or "the company")
Share code: CPX
ISIN: ZAE000016812
Revised terms in respect of the Comparex Europe disposal
1. Introduction
Comparex shareholders are referred to the announcement dated 29 August 2002 and
the circular posted to shareholders on 14 October 2002 wherein it was announced
that Comparex had concluded an agreement to dispose of the European operations
of Comparex ("Comparex Europe") to Montefiore Limited (a company incorporated
for the purpose of acquiring Comparex Europe and in which certain members of the
management of Comparex Europe have an interest) ("Montefiore") ("the Comparex
Europe disposal"). The purchase consideration for the Comparex Europe disposal
was agreed at Euro8,5 million (R87,5 million at an exchange rate of R10,3/Euro1)
payable in cash ("the purchase consideration").
Subsequent to the above, an independent third party presented an indicative
offer in respect of the possible acquisition of Comparex Europe. To secure their
offer, further negotiations between Montefiore and Comparex have resulted in
certain terms of the Comparex Europe disposal being revised, the material
amendment being the increase in the purchase consideration.
2. The increased purchase consideration
The increased purchase consideration to be paid by Montefiore in respect of the
Comparex Europe disposal is Euro10 million (R103,0 million at an exchange rate
of R10,3/Euro1) plus all the shares in and claims against Mosaic Software
Holdings Limited ("Mosaic"), being approximately 35% of the issued share capital
of Mosaic ("the increased purchase consideration"). Comparex Europe owns
ordinary as well as preference shares in Mosaic and its combined shareholding
represents approximately 35% of the equity in Mosaic. The acquisition of the
shares in and claims against Mosaic may be subject to the possible exercise of
certain rights of first refusal by the remaining Mosaic shareholders.
Mosaic is a leading edge provider of electronic funds transfer (EFT) software
for consumer-generated electronic transactions. It has a strong global presence
(19 countries) with offices in the US, a European office in the UK, Australia
and South Africa. Well established within the financial services industry, its
EFT solutions are used by a number of large multinational companies and industry
leaders around the globe. Mosaic`s core product, named Postilion, is a
comprehensive software solution designed to effectively handle the transaction,
delivery and authorization requirements of every aspect of the EFT arena.
3. Financial effects of the Comparex Europe disposal
The table below sets out the pro forma financial effects of the Comparex Europe
disposal on a Comparex shareholder, based on the increased purchase
consideration and the following assumptions:
* the earnings and headline earnings per Comparex share in the "Before the
Comparex Europe disposal" column are based on the published preliminary reviewed
results of Comparex for the year ended 31 May 2002 after reversing R13,6 million
of the impairment provision no longer required as a result of the increased
purchase consideration;
* the earnings and headline earnings per Comparex share in the "Pro forma after
the Comparex Europe disposal" column are based on:
- the published preliminary reviewed results of Comparex for the year ended 31
May 2002 after reversing R13,6 million of the impairment provision no longer
required as a result of the increased purchase consideration;
- excluding the preliminary reviewed results of Comparex Europe for the year
ended 31 May 2002 after reversing R13,6 million of the impairment provision no
longer required as a result of the increased purchase consideration;
- including the associate company losses in respect of Mosaic; and
- including the after tax interest which would have been earned had an amount
equivalent to the cash component of the increased purchase consideration (R90,9
million at an exchange rate of R9,09/Euro1 at 31 May 2002) been invested for a
12 month period at an after tax interest rate of 8% per annum;
* the net tangible asset value per Comparex share in the "Before the Comparex
Europe disposal" column is based on the published preliminary reviewed position
of Comparex at 31 May 2002 after reversing R13,6 million of the impairment
provision no longer required as a result of the increased purchase consideration
and includes the accounting impairment in respect of Comparex Europe deemed
necessary, as a result of the purchase consideration to be received, after
reversing R13,6 million of the impairment provision no longer required as a
result of the increased purchase consideration; and
* the net tangible asset value per Comparex share in the "Pro forma after the
Comparex Europe disposal" column includes the net asset value attributable to
Mosaic and is based on the assumption that the Comparex Europe disposal had been
implemented on 31 May 2002, after reversing R13,6 million of the impairment
provision no longer required as a result of the increased purchase
consideration.
Year ended 31 May 2002
Preliminar Pro forma
y before after the
the Comparex
Comparex Europe %
Per Comparex share Europe disposal chang
disposal (cents) e
(cents)
Earnings (185,8) (50.4) 72,9
Headline earnings (20,0) 76,0 n/a
Net asset tangible value 790,6 737,0 (6,8)
(excluding treasury stock)
4. General meeting
The circular in respect of the Comparex Europe disposal and the notice of
general meeting to be held on Tuesday, 29 October 2002 was posted to
shareholders on Monday, 14 October 2002.
The general meeting of Comparex shareholders will be held in the auditorium at
Block Q, Comparex Park North, 789 16th Road, Randjespark, Midrand at 09h30 on
Tuesday, 29 October 2002 for the purpose of considering and, if deemed fit,
passing with or without modification, the necessary resolution to approve and
implement the Comparex Europe disposal based upon the increased purchase
consideration.
Midrand
22 October 2002
Merchant bank and lead transactional sponsor
Investec bank
Attorneys Joint sponsor
Cliffe Dekker RMB
Date: 23/10/2002 08:14:00 AM Produced by the JSE SENS Department
