| Tue 6 May 2003, 18:40 | | Allied Technologies Limited - The Acquisition By A |
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Allied Technologies Limited - The acquisition by Altech from Nampak Products
Limited of its entire interest in NamITech Holdings Limited and further
cautionary announcement
Allied Technologies Limited
(Incorporated in the Republic of South Africa)
(Registration number 1946/020415/06)
Share code: ALT ISIN: ZAE00001521
("Altech" or "the company")
The acquisition by Altech from Nampak Products Limited of its entire interest in
NamITech Holdings Limited and further cautionary announcement
Introduction
Further to the cautionary announcement published on SENS on 14 April 2003,
Altech shareholders are advised that agreement has been reached in principle
between Altech and Nampak Products Limited ("Nampak Products"), a wholly-owned
subsidiary of Nampak Limited, for Altech to acquire from Nampak Products its
entire holding of the ordinary shares in NamITech Holdings Limited ("NamITech")
(amounting to 51.08%), its loan to NamITech and the entire issued preference
share capital of Clidet No 426 (Pty) Limited ("Clidet"), a black economic
empowerment ("BEE") investment company, subject to the fulfilment of the
conditions precedent more fully set out below.
In addition, Altech will acquire from Pamodzi Investment Holdings Limited
("Pamodzi") the entire issued ordinary share capital of Clidet, which company
has a 28% shareholding in NamITech.
Altech will acquire the direct and indirect interests in NamITech referred to
above for an effective net cash outlay of R559.3 million. Of this amount,
R522.5 million will be payable to Nampak Products for its NamITech shares, the
assumption of its shareholder"s loan and for the Clidet preference shares. A
further amount of R55.7 million will be payable to Pamodzi for its Clidet
ordinary shares.
It is envisaged that Pamodzi will reinvest approximately R19m of these proceeds
in the new BEE structure referred to in 4 below.
These transactions will result in Altech having an effective financial interest
in NamITech of 79.08%, prior to the implementation of the new BEE structure.
The detailed acquisition agreement will contain terms, conditions and warranties
normal for agreements of such nature. Shareholders are therefore advised to
continue to exercise caution when dealing in the company"s ordinary shares until
the agreement is signed and a further announcement is made.
Nature of the business of NamITech
NamITech is one of the largest unlisted technology companies in South Africa. It
is a secure technology solutions provider delivering customer-focussed secure
business solutions and value added applications stemming from the intelligent
use of smart cards and latest secure technologies such as biometrics and
cryptography. NamITech also has strategic collaborative relationships with 42
cellular network operators throughout Africa.
NamITech services the market through four strategic business units namely
telecommunications, gaming and leisure, new and emerging business and the
provision of enterprise security. Integrated Card Technology (Pty) Limited
("ICT"), a NamITech subsidiary, is the largest manufacturer of smart cards in
southern Africa, specialising in microprocessor card technology, provided by a
leading global supplier.
NamITech products include prepaid vouchers, mobile telephony starter packs,
magstripe cards and cheques. Its secure payment solutions include those required
for electronic purse and mobile commerce applications, transaction switching and
card personalisation services.
NamITech has achieved significant market penetration in sub-Saharan Africa,
particularly in the high-growth cellular telephony network and banking sectors.
It has important technology and trading links with Gieseke & Devrient Gmbh
("G&D"), a world leader in the evolving smart card and related technologies
field.
Rationale for the acquisition
The acquisition is in line with the Altech IT vision and focus on convergence
and is complimentary to Altech"s existing smart card technology business, Altech
Card Solutions ("ACS"), which is engaged in the provision of electronic funds
transfer point-of-sale (EFTPOS) products and services and is the major supplier
to South Africa"s transaction acquiring banks. In addition, Isis, another
subsidiary of Altech, is a leading developer and integrator of software used in
the telecommunications industry.
NamITech"s world-class manufacturing, software application development and
secure solutions combined with the products, services and expertise of ACS and
Isis, will provide Altech with operations that offer complete payment technology
solutions to the telecommunications and banking industries. Through this
acquisition, the Altech group will become one of the leading suppliers of SIM
cards, bank cards and secure solutions in sub-Saharan Africa and will realise
significant growth potential for the future due to the synergies that exist.
Empowerment structure
NamITech"s existing empowerment partner, Pamodzi, currently holds an effective
28% interest in NamITech via Clidet.
Altech will acquire Pamodzi"s current interests in NamITech, via Altech"s
purchase of the issued ordinary and preference shares in Clidet, from Pamodzi
and Nampak Products, respectively, referred to above.
However, Pamodzi will continue as NamITech"s empowerment partner via a new
funding and control structure, which will enable Pamodzi to be materially
involved in the future direction and management of NamITech.
Conditions precedent
Altech has completed its due diligence investigation of NamITech.
The acquisition is subject to the fulfilment of, inter alia the following
conditions precedent:
the signature by Altech and Nampak Products of a comprehensive sale of shares
agreement setting out the terms of the acquisition;
Altech entering into agreements with Pamodzi and the other minority shareholders
and technology partners of NamITech;
the approval of the acquisition by the necessary regulatory authorities,
including but not limited to the JSE Securities Exchange South Africa and the
Competition Authorities.
Financial effects
The table below sets out the illustrative financial effects of the acquisition
based on Altech"s 2003 audited financial information assuming that the
acquisition had been concluded on 1 March 2002 and for balance sheet purposes,
on 28 February 2003:
Before After Change
Cents per Cents per %
share share
Earnings attributable to
shareholders 600.8 549.5 (8.5)
Headline earnings per share 320.6 308.0 (3.9)
Net asset value per share 1 322 1 292 (2.3)
Net tangible asset value
per share 1 309 1 006 (23.1)
Notes
The financial information has been extracted, without adjustment, from the
annual financial statements of Altech and from unaudited management accounts of
NamITech, for the year ended 28 February 2003.
The earnings and headline earnings per share calculations are based on the
assumption that the acquisition was implemented on 1 March 2002 and that it was
effective for the financial year that ended 28 February 2003.
The net asset value and net tangible asset value per share calculations are
based on 2 above, but taking the resultant pro-forma assets and liabilities as
at 28 February 2003.
The above financial effects have been calculated on the basis of:
Weighted average number of shares in issue 105 088 000
Number of shares in issue 105 217 000
5. The above financial effects have been calculated on the basis of the
adoption of a new BEE structure for NamITech proposed by Altech.
Having regard to the synergies between NamITech and the existing Altech group
businesses referred to above, as well as NamITech"s prospects, considerable
future financial benefits are expected to accrue to Altech, through this
acquisition.
Documentation
A circular, containing full details of the acquisition will be posted to Altech
shareholders shortly.
Cautionary announcement
Shareholders are further advised that Altech is involved in separate ongoing
discussions which, should they develop, may have an effect on the price of the
company"s ordinary shares.
Accordingly, shareholders are advised to continue to exercise caution when
dealing in the company"s ordinary shares until further announcements are made.
Johannesburg
6 May 2003
Attorneys Joint Sponsors
HR Levin Cazenove HSBC
