| Thu 16 Oct 2003, 16:27 | | Enterprise Outsourcing Holdings Limited - Acquisit |
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Enterprise Outsourcing Holdings Limited - Acquisition Of Atos KPMG Consulting
(Pty) Limited
ENTERPRISE OUTSOURCING HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/014669/06)
Share code: EOH
ISIN: ZAE000022026
("EOH")
ACQUISITION OF ATOS KPMG CONSULTING (PTY) LIMITED
1. Introduction
Further to the cautionary announcement dated 9 September 2003, shareholders are
advised that EOH has reached agreement to acquire the entire issued share
capital of and claims against Atos KPMG Consulting (Proprietary) Limited
("AKC"), from KPMG Services (Proprietary) Limited and the KC Trust ("the
vendors").
2. Rationale for the acquisition
EOH and AKC, which focuses on business and IT consulting, are similar in size,
have complementary business models and share a similar outlook for the future.
Some of the more obvious benefits of the two businesses joining forces are:
- the combined business will become a leading business and technology solution
provider, with a staff complement of over 600 professionals, substantial
turnover, offices in five locations in South Africa and operations in several
African countries and Australia;
- both companies will gain hundreds of already established clients to whom a new
range of services can be offered;
- both businesses will benefit from having access to each others markets -
Commerce and Industry on the one hand and Financial Services and the Public
Sector on the other; and
- the international brand "Atos KPMG Consulting" will give the business global
reach, international connectivity and the reference ability necessary to play at
the top end of the market.
3. Salient terms of the acquisition
The consideration for the acquisition amounts to R20 million which will be
settled by EOH in cash by no later than 1 February 2004 and will bear interest
at prime from 1 September 2003 until the date of settlement thereof. In terms of
the agreement this consideration will be adjusted based on the recoverability of
the accounts receivable of AKC. The vendors have provided full warranties in
terms of undisclosed liabilities in respect of the AKC business. The effective
date of the acquisition is 1 August 2003. All conditions precedent have been
fulfilled and regulatory approvals obtained.
4. Pro forma financial effects of the acquisition
Based on the audited results of EOH for the year ended 31 July 2003, the pro
forma financial effects of the acquisition on EOH"s earnings, headline earnings,
net asset value and net tangible asset value per share are set out below. This
pro forma financial information has been prepared for illustrative purposes only
and because of its nature may not give a true picture of EOH"s financial
position and results of operations, nor the effect and impact of the acquisition
on EOH going forward.
Before the After the % Change
acquisition acquisition
Earnings per share (cents) 29,24 29,08 (0,55)
Headline earnings per 31,52 31,36 (0,51)
share (cents)
Net asset value per share 104,08 103,93 (0,10)
(cents)
Net tangible asset value 50,13 79,59 58,77
per share (cents)
Number of shares in issue 50 667 50 667 -
(000"s)
Weighted average number of 49 238 49 238 -
shares in issue (000"s)
The pro forma financial effects in the "After the acquisition" column are based
on the following assumptions:
- the published audited results of EOH for the year ended 31 July 2003, adjusted
as detailed below;
- the effect on the earnings and headline earnings per share is based on:
- the assumption that the acquisition was effected on 1 August 2002;
- incorporating a pro-forma loss totalling R76 000 generated by AKC for the 12
month period from 1 August 2002; and
- a before-tax interest charge of 17.0% on the acquisition consideration, being
the average before-tax prime interest rate for the twelve month period from 1
August 2002; and
- the effect on net asset value and tangible net asset value per share is based
on:
- the assumption that the acquisition had been implemented on 31 July 2003; and
the net asset value attributable to AKC of R35 million.
5. Other matters
The articles of AKC will be amended to comply with the JSE Securities Exchange
Listings Requirements.
6. Withdrawal of cautionary announcement
Further to the above, shareholders are advised that they no longer need to
exercise caution when dealing in EOH"s shares.
Johannesburg
16 October 2003
Sponsor
Nedbank Corporate
