| Thu 21 Aug 2003, 17:50 | | Announcement and Withdrawal of Cautionary |
|
UCS Group Limited -
UCS Group Limited
Incorporated in the Republic of South Africa
(Registration number 1993/002253/06)
Share Code: UCS ISIN: ZAE000016150
("UCS" or "the company")
ANNOUNCEMENT RELATING TO:
THE ACQUISITION BY UCS OF 100% OF THE ISSUED SHARE CAPITAL OF
AFFINITY LOGIC HOLDINGS (PROPRIETARY) LIMITED ("AFFINITY LOGIC");
THE OFFER FOR SUBSCRIPTION FOR CASH TO MANAGEMENT OF AFFINITY
LOGIC: AND
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. THE ACQUISITION OF AFFINITY LOGIC
1.1 Introduction
Further to the announcement released on SENS on 17 July 2003 and published in
the press on 18 July 2003, Merchant Sponsors (Proprietary) Limited is authorised
to announce that agreement has been reached between UCS, Datatec Limited,
Massmart Holdings Limited, certain members of the Affinity Logic management team
("the MBI Team") and the Affinity Logic staff share trust (collectively referred
to as "the vendors") in terms of which UCS will acquire the entire issued share
capital of Affinity Logic from the vendors ("the acquisition"). The acquisition
is subject to the conditions precedent detailed in paragraph 1.4 below.
1.2 Purchase consideration
The purchase consideration in terms of the acquisition is R41,7 million to be
settled as follows:
a cash portion of R35,24 million; and
R6,46 million by the issue of 10 768 000 new ordinary UCS shares at a price of
60 cents per ordinary share.
1.3 Rationale
UCS, through its subsidiary companies, is a provider of software solutions as
well as a provider of the associated implementation and support services to the
retail sector. Affinity Logic provides a range of outsourced services to certain
large South African retailers and suppliers and has built a sophisticated
infrastructure for service delivery and management. The acquisition will allow
UCS to leverage the Affinity Logic business in order to offer an increased range
and scope of services to its software customers. The acquisition is also
expected to significantly enhance the ability of the enlarged UCS group to
compete for large-scale outsource contracts in the future.
1.4 Conditions precedent
The acquisition is conditional upon the following suspensive conditions:
approval of the acquisition by UCS shareholders in general meeting;
the approval by the JSE Securities Exchange South Africa ("the JSE") of the
listing of 10 768 000 new ordinary shares;
the approval of the acquisition by the Competition authorities; and
the settlement by Affinity Logic of the vendors" loan accounts against Affinity
Logic.
1.5 Irrevocable undertakings
Irrevocable undertakings to vote in favour of the requisite resolutions to
approve the acquisition have been obtained from the holders of 51% of UCS
ordinary shares.
2. OFFER FOR SUBSCRIPTION TO THE MBI TEAM
In addition to the issue of 10 768 000 new ordinary UCS shares as contemplated
in paragraph 1.2 above, the MBI Team has been given the option to further
participate in UCS equity by subscribing for a maximum of 5 million ordinary UCS
shares at 60 cents per share ("the issue for cash"), subject to approval by the
JSE and the approval by UCS ordinary shareholders in general meeting.
3. PRO FORMA FINANCIAL EFFECTS OF THE ACQUISITION AND THE ISSUE FOR CASH
Set out in the table below are the unaudited pro forma financial effects of the
acquisition and the issue for cash on the interim reviewed financial results of
the company for the six months ended 31 March 2003. The pro forma financial
effects are provided for illustrative purposes only in order to show the effect
of the acquisition and the issue for cash and because of their pro forma nature,
may not give a true picture of the financial position of UCS at 31 March 2003
and the financial results of UCS for the period then ended.
Before After Change After the Change
the the (%) acquisitio (%)
acquisi acquisit n and the
tion ion1 issue for
cash 2
Earnings per share 4,0 3,0 (25,0) 3,0 (25,0)
(cents)
Headline earnings 4,9 3,9 (20,4) 3,9 (20,4)
per share (cents)
Net asset value per 78,8 79,1 0,4 78,8 -
share (cents)
Net tangible net 51,3 35,6 (30,6) 36,2 (29,4)
asset value per
share (cents)
Number of shares in 211 205 221 973 5,1 226 973 7,5
issue (000"s)
Weighted average 233 733 244 501 4,6 249 501 6,8
number of shares in
issue (000"s)
The pro forma financial effects in the "After the acquisition" column are based
on the following assumptions:
- the effect on net asset value and tangible net asset value per share is based
on 221 972 519 shares in issue on 31 March 2003 on the assumption that the
acquisition had been implemented on 31 March 2003;
- the effect on the earnings and headline earnings per share is based on 244 500
981 shares in issue during the period from 1 October 2002 to 31 March 2003 on
the assumption that the acquisition was effected on 1 October 2002; and
- the effective tax rate of the enlarged group was 30%.
The pro forma financial effects in the "After the acquisition and the issue for
cash" column are based on the following assumptions:
- the effect on net asset value and tangible net asset per share is based on 226
972 519 shares in issue on 31 March 2003 on the assumption that the acquisition
and the issue for cash had been implemented on 31 March 2003;
- the effect on the earnings and headline earnings per share is based on 249 500
981 shares in issue during the period from 1 October 2002 to 31 March 2003 on
the assumption that the acquisition and the issue for cash were effected on 1
October 2002; and
- the effective tax rate of the enlarged group was 30%.
4. DOCUMENTATION
A circular, which is subject to the approval of the JSE and which includes a
notice convening a general meeting of UCS ordinary shareholders, will be posted
to UCS ordinary shareholders on or about 29 August 2003.
Johannesburg
21 August 2003
Corporate advisor Lead and Joint sponsor
transactional
sponsor
Merchantec Merchant Sponsors Barnard Jacobs
Mellet Corporate
Finance (Pty) Ltd
Corporate law Reporting Reporting
advisors and accountants for UCS accountants for
consultants Affinity Logic
Edward Nathan & Kaplan & Kaplan Deloitte & Touche
Friedland (Pty) Ltd
Date: 21/08/2003 05:15:06 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
